Help, Ocwen no longer doing short sales

[time4change]

I got divorced last year and the home loan was under my (then) wife's name. I stayed at our home and she moved to another place. As I stayed at the house and basically paid the mortgage with several hiccups (2 loan modifications). I'm no longer able to continue paying my monthly payments ($2500/month on a $255k appraised value home) and my ex and I have agreed to sell the home. My sister and her husband have agreed to purchase the home.

The payoff for the house is $269k however, the appraised value is $255k which is a lot less then the loan. So, I contacted Ocwen to get information on a short sale. They told me that they no longer do short sale and offered to do another loan modification. I can't afford to make payments on my house as I've lost my job. I'm currently in crisis mode right now however, I hope to hear from a potential employer in the next few weeks.

What I thought was odd is that I received my payoff quote on Thursday and when I called Ocwen today, they said they no longer do short sales since Thursday.

I'm not sure what options are at this point. My sister is willing to purchase the home but since the appraisal value of the home is less then the payoff amount, they will need to put down a substantial down payment to have their bank approve the loan. I guess short sales are at the discretion of the loan servicer but are there any other options? Any help would be appreciated.

Welcome and thank you for joining the forum....

Ocwen is most likely still doing short sales, however the investor that owns your loan is not doing the short sales...this is the problem that we are experiencing that some are and some are not.

You need to contact HOPE 888.995.HOPE immediately....they will assist in intervening in this situation and trying to work out a viable situation. I find it difficult to believe that Ocwen has suspended Short Sale across the board as a Servicer/Lender....

Again a lot of the information that you get by calling in is disinformation and misinformation caused by the fact that some of the folks answering the phone are in India or if on shore just got off their last assignment at K-Mart. Please call HOPE at 888.995.HOPE immediately for assistance, you can also try ACORN at ACORN: Home

These are non-profits and will assist you for free, they can be quite effective in their efforts...

Please keep us posted.

[time4change]

Thank you. I'll look into HOPE and ACORN.

Please do and realize that Ocwen is under investigation at this time by the Feds, HUD is going in to review what they consider to be abusive servicing practice.

[MudVision]

I have heard other lenders are stopping all short sales cold too. Does anyone know more about this? Should we expect to see this as a trend? I thought the lenders considered short sales as better than letting the home go into foreclosure?

[Moe Bedard]

Mudvision,

I don't see that as being the case....

Here is an excerpt from an article written April 17, 2008

There are some signs that the process is getting smoother. In recent weeks, some mortgage companies have begun to approve short sales for borrowers who can show financial distress but haven't yet stopped making monthly payments. Until recently, servicers wouldn't even consider a short sale unless a borrower was at least 60 days late.

Fannie Mae and Freddie Mac, which own or guarantee nearly half of all outstanding U.S. mortgages, both say they are trying to streamline the short-sale process. Fannie Mae says that it plans to introduce a policy in the next few months under which real-estate brokers would be given an advance indication of the approximate minimum price that would be acceptable in a short sale, a move designed to quickly weed out offers that are too low.

Freddie Mac says it has already given its top servicers more flexibility to accept short sales for homes backed by loans it guarantees or owns. Lehman Brothers Holdings Inc., another issuer of mortgage-backed securities, also is offering incentives in some cases for servicers to arrange short sales or loan modifications.