Getting Short Sales Approved

Wachovia Bank Short Sales

Jennifer Kelly with Wachovia Bank visited our Keller Williams Realty – Elk Grove office meeting today and gave us some great information and nsight into Wachovia’s short sale process. It certainly seems easier than most at the present time and our experience with Wachovia short sales has been just that – easier than the average short sale.

Wachovia Bank has been a portfolio lender and this makes the short sale process easier as there is not an investor to get approval from – it’s their money so their rules. There is currently approximately $111 billion in the Wachovia portfolio, with 27% – 29% of these being 60+ days delinquent. Jennifer is a local Wachovia field rep who is here to help the real estate agent and the homeowner through this process.

What makes Wachovia’s short sale process different?

The biggest thing, is their time frame…Jennifer said that we will have a response to the short sale in 7 – 10 business days from submission! That’s incredible…with most lenders taking 45 – 90+ days, 7-10 days is unbelievable!

Here is the process with Wachovia –

1. We obtain the listing agreement from the homeowner.
2. We contact the local Short Sale Manager – Jennifer Kelly – as soon as we have the listing.
3. The Short Sale Manager will notate in the Wachovia system that the property is listed and we will put a notation in the MLS system that it is a “Wachovia Short Sale”.
4. The Short Sale Manager will conduct a “pre-contract” interview with the seller, if it is necessary.
5. Once we obtain an offer, we send the HUD and a ratified contract to the Wachovia local Short Sale Manager through email.
6. We then receive approval or a response within 7 – 10 business days with a minimum net to Wachovia.
7. We do have to obtain a settlement or approval letter from any junior lien holders.
8. And then we close within 30 – 45 days.

One other huge difference is that we do not have to send Wachovia the financial statement, W-2’s, paystubs, bank statements, etc. When the local Wachovia Short Sale Manager meets with the homeowner the homeowner must be prepared to talk about these items, but it is not required that they are obtained by Wachovia. Wachovia’s goal is to treat the short sale process as much like a regular sale as possible.

Ultimately, Wacovia would like to get the homeowner to do a loan modification. Wachovia is approving reductions in principal balance, interest rates as low as 2% and/or extending the terms to 40 years. They want to get the homeowner down to 31% to 36% debt to income ratio. If the homeowner does not qualify for a loan modification or chooses not to do one, then Wachovia wants the homeowner to do a short sale; they are even giving a money incentive to homeowners to do a short sale.

Here is the bank’s average loss severity for distressed properties:
25% loss on loan modifications
36% loss on short sales
47% loss on foreclosures

As you can see from these numbers, there is an incentive for the bank to allow homeowners to complete either loan modifications or short sales – the bank’s loss is lower with either of these two.

If you are a homeowner and are in distress with Wachovia loan, call us at (916) 230-0371 for more information.

For more information on Short Sales

If you are a seller and wish to contact us for a FREE consultation regarding a possible short sale on your home, please call us at (916) 230-0371 or send email to Lori@ModeandDurhaM.com.

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Lori Mode of Keller Williams Realty, Elk Grove
Certified Distressed Property Expert
DRE License #00935148
www.AllElkGroveHomes.com
(916) 230-0371

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