Thursday, August 7, 2008

Countrywide Short Sale Basics & Details

I just received this info from Pam Voorhees, an awesome Countrywide home loan consultant. It's super informative for anyone involved or thinking of getting involved in a short sale regardless of the bank holding the mortgage note(s).

One out of every four homeowners has a Countrywide Home Loan. With the growing number of short sale requests, we have established a support team to handle inquiries and status calls from borrowers or their agents.

Short Sale Process Example

Customer and/or authorized real estate agent contacts Short Sale Support Team at 1-866-880-1232 to request information on the process and documents needed for the short sale program.

  • The customer and/or agent faxes signed purchase contract, listing agreement and Preliminary HUD-1 to dedicated short sale fax at 1-888-491-4947.
  • The Short Sale Support Team contacts the customer and/or agent within 48 hours of receiving the fax.
  • An appraisal is also ordered within 48 hours of receiving the faxed offer.
  • The appraisal vendor contacts the customer and/or the agent to schedule the appraisal within five days of the offer.

Each potential short sale is reviewed on a case-by-case basis. Customers with accounts whose payments are completely up-to-date and current will not be considered unless there is an imminent default or hardship. Additional borrower information may be required, including:

  • An explanation of hardship
  • A copy of the most recent month's income verification or last three months of profit and loss statements, if self-employed.
  • A copy of the most recent month's bank statement.
  • A copy of the most recent year's income tax return.

The decisioning time varies based on the ability to obtain access to the property for an appraisal and on the financial situation of a particular customer.

The Short Sale Decisioning and Timeframe

A typical short sale decision can take 30-60 days from the date the offer is received. Several factors contribute to this timeframe:

  • Day 1: Receive a legitimate offer (This includes the listing agreement, copy of MLS, preliminary HUD-1, hardship letter and a signed purchase contract).
  • Day 2-15: Order appraisal (Timeframe to obtain the appraisal is approximately 10 days).
  • Day 15-25: Analyze (Obtain necessary financial documentation from the borrower to determine hardship and ability to contribute to the loss, dependent upon input from the borrower).
  • Day 25-30: Negotiate delegated decisions (Be advised that non-delegated decisions will take an additional 30-60 days. Many investors such as Fannie or Freddie and insurers such as FHA, VA, or Mortgage Insurance companies, do not delegate the short sale decision and require their explicit approval. If there are any subordinate liens, then there must be a negotiation with them to accept a reduced payoff amount to release their lien).
  • Day 30-35: Approve or decline.
  • Day 35-80: Receive successful approval of the offer and close.

All timelines noted herein may vary based on the volume of short sale activity, thoroughness of packages and the particulars of the specific transactions. They are meant to be utilized as guidelines and as a means to set appropriate and approximate expectations.

Countrywide's analysis of a potential short sale will include the owner's ability to participate in the loss, the purchase price, the current value of the home obtained by Countrywide and the short sale loss as compared to foreclosure/REO loss.

For more information, call or email me or Pam (941) 586-8079


Rod said...

BEWARE - It is highly unlikely to be resolved in this short a timeframe. I just had a case where the appraisal wasnt even ordered until over 2 months had gone by AFTER the entire doc package had been sent - and acknowledged as being complete.

shortsalesafe said...

Nice article. Enough information to read! One thing to keep in mind is that proper documentation is vital to a Countrywide short sale.