A Ditech Short Sale in Elk Grove That Seterus Tried to Hijack
In case you don’t know, Green Tree short sales are no more, and the company name has changed to Ditech. I predict this is not the last Ditech short sale I will see. Many real estate agents in Sacramento discovered Ditech when their borrowers dumped our local lenders and opted in for a sparkly shiny new mortgage company they found online, which on many occasions could not perform. I personally recall having several transactions held up because the Ditech mortgage guys were not familiar with our local appraisers nor how we do business in Sacramento, and it caused complications. Hopefully they are better now, but I haven’t run into a mortgage through Ditech for years.
This is a story of a short sale in Elk Grove that has so many bizarre twists, I hardly know where to start, so I will start at the beginning. I listed this home in November of 2014 and it took us 4 months to get an offer anywhere near the comparable sales. We received 4 or 5 offers, all around 80% of market value, which banks don’t take. I’ve been selling short sales for 10 years and have closed more short sales than any other agent in a 7-county area of Sacramento. That makes me the top short sale Realtor for Sacramento. I don’t know if it’s the buyer’s agents or the buyers themselves who don’t understand how short sales work, but I’ve been doing it long enough that I know better than to throw lowball offers at the bank and hope they will stick.
One Sacramento agent even admitted that’s his method of operation. Throwing crap at the wall to see if it sticks. He says he always takes the first lowball and sends it to the bank and then when it’s rejected, he know how much the bank wants, so he changes the price and puts the home back on the market. That seems so defeatist to me. Why not do your homework that you’re trained and paid to do, figure out market value (based on condition) and sell the home ONCE? That makes a lot more sense, doesn’t it?
We sent the offer and HUD to the first lender, which was good old’ Seterus, and the investor was Fannie Mae. In reviewing the file now, I see we received the payoff from Seterus a few days after we received the short sale approval letter, although the payoff was dated the day prior to the approval letter. This tells me that Seterus knew how much it was owed. Instead, it sent a short sale approval letter for $100,000 more than its payoff. Seriously. If it was owed $155,000, for example, it approved the short sale by accepting $255,000. If this makes your head hurt, it’s because the first mortgage was NOT short. I guess Seterus just found a way to collect an additional $100K or they can’t read, and I’d hate to think they can’t read their own payoff statements.
The seller had owned this property for more than 15 years. There were many refinances and a subordination refinance in the public records. The seller hadn’t made a payment in so long that we had no mortgage statements, and although requested from Seterus, we did not receive the payoff until after the short sale approval was issued. There was no way we could have accurately predicted the payoff was so low as to not make this a short sale unless we prematurely paid for a prelim, which we don’t do, and even then, we still need the beneficiary statement.
We told Seterus no thank you to the short sale and proceeded with Green Tree, which held the second loan. It took Green Tree from February to the end of July to issue the approval letter and it bumped up the price by $10,000, during which time the company morphed into Ditech and this became a Ditech short sale. Then, the buyer’s appraisal came in $10,000 less, right where the price should have been in the first place, which was the price we had originally submitted. We spent another month obtaining a revised approval from Ditech.
The Elk Grove short sale closed this week. This has been almost a year of hell for the seller but we got it done. The buyer waited almost 9 months to buy this Elk Grove short sale. They could have had a baby in that time. This is another reason to only sell the home once and to sell it to a committed buyer, if at all possible. And a listing agent’s odds and seller’s odds are increased if the buyer is willing to pay market value.
In closing, it’s interesting to note that Green Tree was fined $63 million for abusing customers. The Consumer Financial Protection Bureau and the FTC went after Green Tree for its deceptive business practices and harassment of borrowers. No joke, some of those negotiators at Green Tree would scream at us over the phone and threaten to cancel the short sale if we didn’t drop what we were doing and send in documents. My clients hated Green Tree with a passion. And now, they are Ditech.