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A Ditech Short Sale in Elk Grove That Seterus Tried to Hijack
Green Tree short sales are now Ditech short sales and not any easier.
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.
A Short Sale Home in Fair Oaks with Two Loans Closed Fast
As I drove away from my closed listing of a short sale home in Fair Oaks yesterday, I wondered why I picked up the Supra lockbox. It’s not like I can use the lockbox for anything ever again now that MetroList has rescinded its agreement to allow us to continue using our Supra lockboxes until they die. I had more than 70 lockboxes and did not exchange them all in the rip-off 2 for 1 Supra lockbox exchange because MetroList promised we could keep them. Which means now I have about 40 lockboxes rolling around in my trunk that are useless because MetroList backpedaled.
Well, I do know why I picked it up. I retrieved my lockbox because I owed it to the new buyer of that home in Fair Oaks to retrieve. Because I have a responsibility to my profession. We, Fair Oaks Realtors don’t go around leaving our personal property attached to homes in Fair Oaks, even if it’s useless to us. I wonder, though, how many agents will just leave their lockboxes? You know how some agents are.
Homeowners can thank MetroList for all those abandoned lockboxes that I predict will be happening throughout Sacramento.
The home in Fair Oaks that just closed was a short sale I had listed in MLS on May 15th. It was a Fannie Mae short sale; Seterus was the servicer for Fannie Mae, and I’ve closed hundreds of short sales since 2006, which means I have knowledge other agents do not. One of the things I know about Fannie Mae is it does not want to see any offer prior to 5 days on the market, with at least 2 of those days the weekend. Makes sense, Fannie Mae expects decent exposure on the market, no side deals. I also have an account at Fannie Mae’s portal that keeps me up-to-date on new rules and where I expedite my short sales.
We had multiple offers, too, and chose the buyer most likely to wait for approval, which is the buyer whose agent is cooperative and submits the offer the way we need it submitted for approval. You’d be amazed how many agents contest what is actually in their best interest and their client’s best interest, but what can I say?
Come August 15th, 3 months later, we had closed escrow, and there were two loans on this short sale. I also hear agents say they don’t want to deal with two loans on a short sale, probably because they’ve had bad experiences. They haven’t worked with me. I do many short sales with two loans. It’s really no big deal.
I’d say 90 days from listing to moving out of the short sale home in Fair Oaks is a fairly decent approval process. I didn’t see the buyer yesterday or I would have thanked him personally for going into escrow with us. My seller is thrilled beyond being thrilled, and extremely relieved, and that’s the most important thing to me.
P.S. Look out for those chickens in Fair Oaks.
Three Sellers Approved for Three Sacramento Short Sales
You know that expression: when it rains, it pours? Often, these little bits of wisdom extracted from life and handed down over the years from generation to generation are based in some kind of truth. Yesterday was one of those days. This Sacramento real estate agent received short sale approval letters on three different short sales in the Sacramento Valley.
As usual, something was wrong with each file. Things are rarely perfect in the business of Sacramento short sales. Agents who expect perfection are those you find hunched over hugging their knees in the corner, rocking back and forth and singing to themselves.
In one file, the lender reduced our commission. This file is a HAFA short sale. Our listing agreement was signed way before the short sale approval agreement arrived. The bank told me that its investor only pays a reduced amount, and that they’ve always handled their HAFA short sales in that manner. They’ve always done it because no other short sale agent challenged the bank — that’s how they get away with it. If they don’t authorize the rightful commission, the Treasury Department won’t pay them; we’ll see how they like that.
The bank can ignore the MHA handbook and the CAR explanation of HAFA rules, but they can’t ignore Laurie Maggiano, the Director of Policy for the U.S. Treasury. They coughed up the commission.
In another file, we need a final court document to close. We’ve been trying to get this court document since October. The case was settled two years ago. The sellers’ lawyer keeps saying it’s coming and she will get it, but it’s not coming and she doesn’t have it. The clerks at the court are taking their sweet time, too. Now that we have the approval letter, the clock is ticking. We might have to call the court every single day until we get the letter. Persistence is my middle name. Hey, I close more Sacramento short sales than any agent I know.
And in the third, Bank of America took so long to get us the HELOC short sale approval letter that we’ve had one short sale approval letter and one extension already from Seterus. Usually, Bank of America is pretty fast. Especially since they use Equator. I am busy today trying to figure out what took them so long with this particular file so we never repeat it again. Seterus refused to issue a third letter until we received the approval from Bank of America, and who can blame them? Not me.
Overall, yesterday was a great day. Three short sale approval letters in one day, and 3 more files headed for closing. Three more Sacramento short sales are over. More happy, happy sellers and buyers!
