OK, as I sit waiting for my poor house to get through the short sale process, I wondered if anyone here that really knew internal bank processes could explain how a bank goes through their approval decision process for a short sale. I know that they do an appraisal (to make sure that it is reasonable with the offer), I know they have forms that the seller fills out to determine if they should consider approving a short sale - and I know there is a "negotiator" and an "investor". Could some explain what specifically the negotiator does, and what the investor does? Are there any other steps? I'm really just trying to understand how banks work internally, not determining how much longer it's going to take. I know many realtors, and they have explained the experience I will have - but I don't know anyone from a bank that really understands the internal banking process. I assume the process is fairly consistent across banks (some probably better than others) - but just wondered if there are any bank people on this board.....

DeblinFL - Don't have even one answer to your questions but thought I would post to let you know we are still here with you and can't wait to have the celebratory party - live, on-line and virtual. I even have it on good authority that Wayne plans to show up!

Lock up the chocolates and make sure the red-velvet carpet posts in front of your guest bedrooms aren't in the way. Wayne can be very persistent at times! Just toss him out and let us know how the negotiations are going. If you made a good offer, bet the bank will take - all in their own time, of course. So hang in there...

You know - Wayne has been calling NON-STOP!!! But he said he wanted to make sure it was after all the work was done. So typical!! . We are hanging in there, but it is taking so long. Luckily, the place we're renting is owned by wonderful people, and they extended our stay a bit, so we won't be homeless for a little while yet. I've kept looking, but just never saw anything I liked as much. I drive my the house regularly to tell it we're going to take care of it ( ), and I keep sending my contractors I've lined up status emails so they're ready to go whenever we are. I'm thinking I picked good people, because they always get back to me immediately to let me know they appreciate the updates, so I just keep hoping we'll hear something soon..... As soon as I know something, I'll be sure to post and let everyone know. I'm thinking, though, that maybe I should just send Wayne to you to make sure he doesn't get in the way. That way, all the chocolate is mine!!

maybe modular is the way to go built in factory no delays and no weather warping wood and destroying things and with modulars you can get 2x6 stud walls and 2579 sq.ft. and guess what if can go 60 mph down a highway it with stand alot more than traditional stick built .Norris homes has the best floor plans out there with the best building practices and no it is not a double wide they come with 9 and 10 foot ceilings .What you pay when you order it is what you pay not any extra for over runs .My neighbor down the street just built and went almost 30 thousand over because of rain and higher prices .

The bank doesn't normally do a full appraisal. They have what is called a BPO (broker price opinion) made and depending on whether it is a drive by or a full review of the property it could be good or bad.

It also depends on how many outstanding mortgages the seller has; how much is owed on each and how willing the secondary lender is to taking a hit.

Another - has the seller had a previous sale fall through so at least some of the early ground work for the listing agent has been covered. I have found if the property has been in contract and fallen out for whatever reason - the listing agent should have a "good" feeling about what will fly for the property.

One thing we did so we didn't have to deal with the bank coming back and asking us to make a higher offer we had a home inspection and an appraisal by our own appraiser done. So I could truthfully tell the selling agent - the offer stands and we will not go higher and it was backed by a professional appraisal. Plus because the property had had other offers, we were comfortable with the offer being in an acceptable range for the first/primary lender.

With all that - what took longer was the point when the secondary bank had to agree and then wait for the investor to agree.

Where are you in the process? The listing agent should be telling your agent where you are in the process. Make sure the agents are staying on top of things. At a minimum I would have my agent contact the listing agent at least once a week.

This message has been edited. Last edited by: Charming,

Hi Debi, didn't see your post earlier.

A negotiator is a 3rd party who represents the seller. They're frequently brought in by the seller's realtor to facilitate/manage the short-sale process.

The involvement of an investor indicates that the seller's lender probably packaged up the seller's note (with other mortgage loans) and sold it after the loan's initial closing. The investor may be a large institution, e.g. Fannie Mae or Freddie Mac. The seller's lender may have retained the servicing function (typically in exchange for a monthly fee on a percentage basis) - that is, collecting the monthly payments, impounds, etc. and acting as the seller's primary contact.

So, if the seller and/or their negotiator fails to follow the investor's guidelines, delays may occur. Another very likely delay could be if the seller's attempting to negotiate a waiver of any deficiency judgement(s) from one or more lenders. If add'l (subordinate) lenders are involved, they could be attempting to negotiate a partial/token payment from the primary lender and also be involved in negotiations with the seller WRT a deficiency judgement.

And, yes, the property's valuation may be in dispute. Besides, the valuation ultimately affects the amount of any potential deficiency judgement(s).

Was a judicial foreclosure action initiated by any of the lenders prior to the short sale? If so, the public record might give you an indication of both the process' status and some insight into parties involved and the extent of their interest(s) - that is, if nobody's previously communicated this info to you. Hopefully, your agent is in close contact with either the other agent or their negotiator and receiving frequent (usually weekly or semimonthly, at minimum) status reports.

Needless to say, given the multiple parties involved and the complexity of the situation, it's not surprising that the system is often fraught with delays.

This property must be special, right? Best of luck to you -

JMHO.

This message has been edited. Last edited by: SurfNow,