Seterus Short Sale and the Peter Principle Rules
The beauty of being so deeply entrenched in Sacramento real estate is there is always something horrible happening every day, some new fresh hell the likes of which you’ve never seen before and, in some cases, with a little bit of luck, you’ll never see again. It’s almost like a storm chaser’s unicorn photo opportunity: double tornados popping up on the horizon under a supercell. You’re mesmerized, wondering how can this happen? Listen to this. We received, for example, a short sale approval letter for an Elk Grove short sale from Seterus when the loan was not short.
Yes, not short. Not a short sale. Yet Seterus approved it.
How does a major lender like Seterus, which forged its humble beginnings in this world as IBM, issue an approval letter for a short sale, accepting almost a 100,000 more than it is owed? It’s the Peter Principle, I imagine, at work in front of our very eyes. As a Sacramento Realtor, we can’t often figure out the unpaid balance ourselves because there might be too many loan modifications noted or the records could be wrong, or we don’t have a copy of the mortgage statement, not to mention, it’s not really our job. We rely on the lenders to provide that information. Sometimes, even the borrower doesn’t know.
After Seterus sent us the approval letter, we moved on to secure an agreement from the second lender. The investor is Fannie Mae, and Seterus is merely the servicer, and even Fannie Mae approved the short sale, which tells you something about how our government is run and another fine example of the Peter Principle. We discovered the error when we finally received the mortgage payoff statement we had requested. Although, Seterus did not discover the horrendous error until we asked for an extension because Green Tree was dragging its feet. A Green Tree short sale often takes longer when Green Tree is in second position.
When the escrow company then ordered a beneficiary demand to payoff the existing first loan, which we would use to compute the proceeds due the second lender, Seterus informed the escrow officer that it would take another 2 weeks to deliver that document. To try to expedite, we asked the seller to intervene with her lender and to try to move up that time frame. Let’s just say the seller reported back, exhausted, with a whole new appreciation for the crap we endure day after day.
But wait, it gets better. After we informed Green Tree that it would no longer be stuck with the maximum payoff that Fannie Mae allows, which is $6,000, and shared the good news that Green Tree will receive at least 10 times that amount, Green Tree muttered: We need to order a new BPO. What? You were just saying the letter was in queue. Take the money and run. Hello, Peter Principle?