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Short Sale Approval

Moderator Emerita

Re: Short Sale Approval

IME most short sales take 60 to 120 days from contract to closing.

This assumes that the short sale did not have a prior approval by the seller's lender.

If there is a prior approval, you can close the short sale in as little as 30 days.


It does assume that the attorney's office/agents are experienced short sale experts and that the seller is cooperating. The seller has to provide an extensive list of documents for the original package in order for the seller's bank to accept the offer.


If the seller delays providing the required info, then the sale is delayed.

Another delay occurs in two other areas:  if there is more than one mortgage or if the loan has MI on it (either lender paid or borrower paid MI). MI approval delays the process.


Having said the above, if the loan was originally a Wachovia loan that was taken over by Wells Fargo, then their process is very quick and efficient if only one loan is on the property. They have local reps that handle those short sale files exclusively. Those sales generally get approval in 30 to 45 days. It sounds like the servicer is Wells though - and did not originally go through Wachovia.


The agent should be in contact with you for the current status. Given that you are nearly 3 months you should have an approval here any day. Get with your agent to find out what the hold up is....

Message 11 of 18

Re: Short Sale Approval

I only looked at approved short sales so I wouldn't have to go through that. I'm already banging my head against the wall at 45 days in :/
Message 12 of 18
Valued Contributor

Re: Short Sale Approval

I did a short sale purchase last year. Put in an offer in June of '11. Didn't get an acceptance of the offer until October. The home was on the market and I am assuming they were waiting to see if any other / better offers came in. Even after the offer was accepted I did not close as anticipated. The original close date was early December. I closed the end of January.


It was a pain at almost every stage. Although a part of my pain was poor representation by my realtor. (Long story / different post subject.) The bottom line was it was worth it in the end. I got a good deal on a property I love. I'm in CA but I don't think that had anything to do with the process. It was a single mortgage also. No second lender to deal with.

Best financial advice I ever got: "Just imagine what an adult would do and do that."

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Message 13 of 18
Regular Contributor

Re: Short Sale Approval

My agent is pitiful to be kind but I don't want to start all over again.

This is a Wells Fargo house. There is one loan and the seller is good with the HOA. The seller has satisfied Wells data request before. This house has been in escrow twice but the buyers walked for lack of patience. The house re-listed 4 months apart both times.

The sellers accepted my offer the day after I made it. The seller flipped the Arms Length agreement the day she got it. Wells just needs to get moving before I do.

Thanks for the responses all.

Oh, I'm not sure what MI means.

Message 14 of 18
Moderator Emerita

Re: Short Sale Approval

MI means mortgage insurance.

Prior to the credit crunch the lenders saw what was happening so when they originated the loans and sold them in bundles, the lender placed mortgage insurance on the properties within the bundle and they paid for the mortgage insurance, even if the LTV was less than 80%. This is referred to as Lender Paid Mortgage Insurance (LPMI). We don't know which loans have LPMI until we are in the short sale process. We only know when we have Borrower Paid Mortgage Insurance (BPMI) right from the beginning.


How this affects you is that many of the loans have mortgage insurance and it is one more approval that is required with a short sale approval.

The MI companies are the one's that come back to the seller and ask for the seller to bring $x to closing or sign a note for n years at zero percent for repayment. And it adds weeks to the overall short sale approval process.


Good luck with your approval...Wells does have a tendency to be more toward the 120 days approval (or even longer if the attorney is not in constant contact with them)

Message 15 of 18
Regular Contributor

Re: Short Sale Approval

Thank you. That clears things up.

I though Wells Fargo was one of the faster banks for clearing out shirt sales.

Oh well, I just need to be more patient.

Message 16 of 18
Frequent Contributor

Re: Short Sale Approval

My husband is in the process of doing a short sale with his condo... We got an offer on Oct 17th and are STILL waiting on final release of the debt. We have a pre-approval, which is good... We would have been done with this in December but BofA the first trust holder sold the loan literally at the 11th hour to M&T bank.... M&T got confused and sent us to a servicer who confirmed they had the loan, which in the end after 7 weeks of fooling around they did not...


SO frustrating for both the buyer and the seller... TRUST ME!! We should be settling on the house April 25th, pending no more issues!!

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Message 17 of 18
Regular Contributor

Re: Short Sale Approval

I'm sure it is hard for you as well.

Message 18 of 18
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