My CW Short Sale Journey

[oc949]

Dear Reader,

I want this thread "My CW Short Sale Journey" to help people, as I have been helped greatly by the LoanSafe forums.

My thread is a work in progress because I am currently underway with the CW shortsale process. I want to document here how I came to the decision and how the process is going. Ultimately I hope to tell everyone about a successful outcome to the process. I hope that sharing this journey will help you. Please keep coming back to see how my journey is going. Now here are the details...

My story is similar to everyone's: I'm responsible, college educated and was employed, living in a nice house that I put 20% down on, with a single CW 7/1 ARM mortgage. Fast forward to today: my house is far underwater, and I am unemployed and unable to make payments without further drawing down precious savings. I couldn't refi even with an income, because of the fallen house value. And CW won't discuss loan mod until I have another income, which I am trying to get. My loan is not backed by Fannie or Freddie, so Obama's plan won't help me.

I spent 3 months reading the LoanSafe forums studying peoples' experiences and figuring out the best option for me. I came to these 3 clear focused conclusions:

1. CW doesn't want to help me. They have a fiduciary responsibility to the investors who back the loans and their interests are more important than ours.

2. CW's loan mod process amounts to what one person here called "predatory mods", where they drag you through months of calls and uncertainty, then they come back with a multi-part loan mod which often leaves you worse off in the long run: your interest rate lowers initially but then resets back up; deferred interest and fees may be added in to the principal; you may now face PMI, which is expensive and an additional burden. In short, LOAN MODS SUCK. Please excuse my teenage lingo, but how else to describe them? SAY NO TO LOAN MODS, at least until the process becomes more humane and the outcomes more reasonable.

3. I bought my house to be a balloon, not an anchor. I want to pick the best of a bad set of options and MOVE ON, unencumbered by the baggage that this state of affairs brings with it. I want to stop worrying about my housing problems, because it's affecting every other part of my life.

So I decided to SHORT SALE my house. Here is the hard and fast of what I have done so far:

1. I contacted a realtor who I trust through references, and who specializes in short sales. I asked her about her track record with the process, and I educated myself on what to expect.

2. I had her immediately put my house "on the market" by listing it on the MLS. CW wants to see that you've tried to sell your house for at least 90 days before they will consider a short sale.

3. I paid off all my debt except mortgage, and have reduced my expenses to the minimum. CW will require at least 2 months of bank statements to show your financial activity. And they will run a credit report to see your full financial picture. Make sure it shows you to be someone under hardship, not someone who recklessly spends and loads up on debt of every kind.

4. I wrote a hardship letter. I did not write it in one night. I have been writing it on and off for 2 weeks. And I will work on it another 2 weeks if I have to. I want my hardship letter to be authentic and genuine. And it can only be that way if I take time with it.

5. We found a prospective buyer. This took a lot of work. I had to find someone who understands the short sale process and who is willing to wait out the several months or more that it will inevitably take to conclude the process. There are so many stories of buyers who won't wait out the process and you're left having to start over and find another one. Find a good prosepective buyer who's willing to work through the process as much as you are. Anyone else is wasting your time.

6. I stopped making my mortgage payment. This was the hardest of all the steps for me. I hate it, I don't want to be a delinquent homeowner, but it's essential. You can't demonstrate hardship to CW if you're making all your payments on time.

This is where I am at so far. My 3 near-term next steps are:

1. My realtor will negotiate an offer with the buyer, and she will then write up the offer and submit it to CW.

2. My realtor will follow up with CW daily until they accept entering the short sale process on the property. This is NOT saying they will accept the offer. It just means they are willing to enter into the process.

3. If CW collections calls, and I am sure they will, I am going to tell them I am in short sale on the property and to stop calling me. The right hand does not know what the left hand is doing at CW, so I am prepared to have to tell them several times. I am not looking forward to hearing from a predatory collection agency, but I have no choice in the matter. Hopefully they will stop calling after CW formally acknowledges the short sale.

I hope that my account of my journey has been useful to you so far. Please keep checking back as I update it. I would welcome your comments, but please, in the interest of keeping this thread focused, only contribute your experiences on the CW shortsale process. You have the power to help me. And in turn I can help you, and in the process help others.

Let's help eachother out. Peace and happiness to everyone. More soon....

[oc949]

For those of you following my story, here is my update. It is now the end of July.

1. I found a buyer and submitted my short sale package to the lender. It includes a hardship letter and a financial worksheet. The offer was submitted with a competitive price for current market conditions. Do not lowball shortsale offers below current market price.

2. BofA (formerly Countrywide) acknowledged receipt of my short sale package in writing. It may close in 40 days. There is 20 days of review followed by 10 days of investor review followed by 10 days of escrow. But anything could happen: the lender may reject my package after review; the investors may reject it; the property may fall out of escrow if the buyer pulls out. You want to find a solid buyer.

3. I endure repeated calls from collections agents at Bank of America (formerly Countrywide). The left hand does not know what the right hand is doing. Their policy is to continue the collections process until the house sells under short sale. My credit is getting dinged badly I am sure but I don't have the heart to check how much (my score was 860 in April right before all this started).

4. I researched tax consequences of short sale. On your primary residence there is none. The forgiven amount by the lender is not taxed to you as income. It will be on your secondary home.

5. Now I wait, and I wait some more. At least BofA is better about acknowledging things in writing than some other lenders. And my realtor tells me they are more streamlined and organized than the others. So for now, I am praying that this will all work out for me.

More soon. Please share your stories. No one has yet responded to this thread. Come on guys, I'm putting my experience out there. Please do the same.

[dedsmalls]

I too am currently in process of shortselling my home with CW loans. (see shortsale forum : Shortsale in CA) I will be watching your outcome to see how it goes. Good Luck

[katita]

Any of you please tell me
Do you have to pay property taxes when you decide to stop paying mortgage and go for short sale?
Is it a second property any of your short sale?
I lived in my house until end of May and rented inmmediately.and went to my small condo where previous tenants left ..what I am not sure if tell CW that I rented the house and also ask for short sale....they might think I am pocketing the rent income...which is actually not true I am paying debt I incurred for beign unemployed

Do you think if asking for mod just to delay the process is good idea before telling them I''ll go for short sale? My home is 100% under water it's worth 310,000 and I owe to CWide 560,00

[hope67]

oc949..I hope things will workout good for you.

What's the difference (shortage) between the short sale price and your unpaid balance? Thanks