Earlier this summer, I listed a home for sale as a short sale. Multiple showings ensued and we ended up with an offer above the current asking price and at the current market value, taking into consideration the condition. Let’s call the number $175,000.
The seller and I compiled the short sale package, which included at least two copies of the same form, bank statements, tax returns, a hardship letter, etc. It was then we were informed by Quicken, the loan servicer, that the seller would have to call for an “Application for Success” after discussing with the Quicken agent various options such as loan modifications, loan forbearance, etc.
Quicken quickly realized a modification wouldn’t help, the Application for Success was sent, completed and sent back in. All seemed well until Schwab Mortgage weighed in and decided it would offer the seller a two-year modification, take it or leave it.
For a variety of reasons, the modification was no more useful than that already offered by Quicken and so the seller declined out of necessity.
It turns out, that was the end of the short sale process. Because, as we just learned, Schwab Mortgage generally will not accept anything less than a near-full payoff.
Here’s where logic takes a holiday. The home is worth around $175,000. The note is for about $300,000. I’m not sure where Schwab Mortgage expects to find a buyer willing to pay a 71 percent premium to purchase a house, but that’s where things stand.
And so foreclosure ensues. And another Schwab Mortgage short sale I would be taking after the first of the year likely is out the window as well, for the simple reason that a short sale required a modicum of common sense on the part of the lender.
When logic takes a holiday, however, nothing can be done. And that benefits no one.