Examining the best and worst of short sale lenders from 2011 with the hopes that they will all be on the “good” list for 2012.
2011 was a great year for short sales, making up approximately 21% of all sales in California. Although this was an improvement over 2010 short sales, the increase was not nearly enough to meet the needs of the distressed housing market. We wanted to examine the lenders that participate in short sales to see which ones are helping and which ones are harming the market.
After reading our list of good, bad and ugly, take our polls of which you think are the best and worst of the short sale lenders!
The Good
There were some lenders that were outstanding this year with regards to short sales. Certainly all lenders looking to improve their short sale numbers should look to these lenders for guidance.
1. Wachovia – We love working with Wachovia for more than one reason. They are simply the best to work with regarding value disputes. If you can provide the documentation to support a lower value, 9 times out of 10 they will reduce. In addition, they almost always offer incentives to sellers for completing the short sale…even if it’s not their primary residence! Finally, their turn times are approximately 20-45 days. This beats every lender hands-down.
2. Capital One – Fast and friendly best describes Capital One. Their short sale specialists are both professional and knowledgeable. They are also proactive in reaching out to agents for documents or information needed, instead of waiting for the agent to check in on the status. Working with them has been an absolute short sale dream and we expect that will continue into the future.
3. Select Portfolio Servicing (SPS) – SPS seems to have short sales down to a science and we can’t say enough good things about them. Friendly reps only enhance the already smooth process. They know to assign a short sale negotiator right away and get agents into good hands that will guide them through the short sale.
4. Chase – For phenomenal seller incentives, see Chase. We’ve seen up to $30k in incentives for seller relocation…and that doesn’t include the additional $3k for the HAFA relocation incentive! In addition they are fairly easy to work with and have good turn times. The only nagging complaint we have is their pickiness on the wording on the HUD-1 for the HAFA relocation incentive. It drives our escrow companies crazy. Overall, however, we believe that Chase will have nothing but positive things to offer in 2012.
5. Real Time Resolutions (RTR) – Other 2nd lien servicers should take note of how RTR handles their short sales. They understand that they are in second lien position and they generally accept what the first lien is handing out. Agents have to do a little more legwork by providing comps to them, but their turn times and ease of working with them more than makes up for that.
The Bad
These lenders weren’t good enough to be at the top, but were better than others. With some improvements, they could easily be the best next year.
1. Wells Fargo – When Wells Fargo is great, they are GREAT. The problem is when they are not great, we all suffer. It’s really all dependent on the negotiator you are working with. One other note is working with them through Equator is awful. It’s much easier to do the short sale the “old fashioned” way of faxing docs. If they can get all their negotiators on the same page and fix the tediousness of Equator submissions then they will definitely be on the best list next year!
The Ugly
The lender names we dread most of all…
1. ING – Avoid at all costs. Their reps are rude and uncaring and they would rather take the property to foreclosure and keep as an REO than do a short sale. They also have a “blacklist” of agents that dare to disagree with them during the short sale process. Once on the blacklist, not only will they refuse to work with the agent but they will also refuse to work with that particular seller on any workout options to avoid foreclosure.
2. Greentree Servicing – When in 2nd lien position, Greentree should take great pride in their ability to obliterate short sales. Due to SB458 passed in July of 2011, Greentree went from being one of the best to be the absolute worst. One short sale in particular we worked with in 2011, Greentree went from accepting 5% before SB458 to demanding no less than 30%…and the 5% approval was for settlement in full! The only thing that changed was a law was passed. Their ridiculous 30% requirements are responsible for many short sale deaths. They have told us time and again they would rather take $0 after a foreclosure than settle for less than 30%. Unless they change their greedy ways, we expect that they will be out of business very soon.
3. IndyMac / OneWest Bank (OWB) – Where IndyMac failed in the mortgage business, OneWest Bank has carried on their traditions into short sales. They both do short sales in-house and outsource to a third party (ServiceLink) and that is where their short sales fall apart. ServiceLink reduces agent commission to 5% and requires a 1% fee for their services (minimum of $1000 and a maximum of $2000). Their communication is tedious and unfriendly. They are also very unhelpful when it comes to foreclosures. They will allow a home to go to foreclosure on the first sale date even if in active short sale review with all parties in agreement on purchase price. When it comes to approvals, they fail to include all information which often leaves shortages for others to pick up. If OWB would simply take back short sales into their capable hands, they might make it a much better – and less expensive – process for all.
4. US Bank – While working with US Bank on 1st liens is not bad, they really get us on the 2nd liens. They require a full 20% or more to close the short sale. Again, this kills the process when no one can contribute that high of an amount.
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