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How I Snatched a Short Sale From Foreclosure Three Times- Once After The Public Trustee's Sale

So another year has slipped by and despite all of my resolutions to be disciplined and do better than in previous years, I have only a handful of blog posts to show for a whole year of work. I feel bad about this. My husband and colleagues say to me- "Blog." Yet I procrastinate. I try to think of what to blog about and then typically I think of something while I am in the car. By the time I get to a computer I forget what it was that I thought I had to say. So here I sit, before my computer-resolute to start the New Year off by blogging, trying to think of all the real estate wisdom I could share, of all the lessons I have learned in 40 or so transactions this year.
Unfortunately the only thing that comes to mind is a true tale of my most challenging short sale.

It began like most transactions; a friend called me and said she had a friend and colleague who had been through a messy divorce and needed help selling her home, which her ex-husband currently occupied, could I talk to her? Naturally I agreed and called the friend- let's call her Hope- for reasons you will see as this tale unravels. The first time I spoke to Hope, she was about to be remarried, her ex-husband and her 2 grown children were living in the house and hadn't made a payment in over 6 months. The value of the home was substantially less than the first loan not to mention the second and of course the house was headed for foreclosure and Hope's credit was headed down the proverbial crapper.

Since Hope was still on title and the notes with both lenders I had her sign a third party authorization and made inquiries on her behalf, after which I was convinced the only way to get her out form under the house would be via short sale. Somehow we managed to get both Hope and her ex-husband to sign listing agreement, addenda and all doce required for a short sale, We quickly got offers and submitted the highest one to the first lien holder- the infamous OCWEN FEDERAL. I should probably mention that we submitted a complete packet, as we always do, offer, lender letter, HUD, copy of earnest money, listing agreement and all of the sellers doc, including tax returns, pay stubs hardship letter etc After a week or so we called Ocwen to confirm that they got the packet and were reviewing the offer (I am a bit of a dreamer). We were transferred to Ocwen India where our negotiator was named Geeta Punjabi. Now Geeta asked for duplicates of many docs and had us faxing to her daily- the largest fax I recall was 68 pages- who cares about those trees anyway? After 6 weeks or so of this Geeta continued to assure me that approval would happen "by Friday"(maybe I should have asked, " which Friday?")

Meanwhile the trustee's sale was looming precariously close and Hope was a nervous wreck as was I. Geeta assured me that the sale would be postponed because they were working an offer. Because this wasn't my first short sale and I am cursed with a non-trusting nature I called a friend of mine who is an attorney. He drafted a legal document for Hope to take to court, a Demand for a Temporary Restraining Order (TRO in attorney speak). So we held on to the doc until the day before the foreclosure sale and when neither the promised short sale approval nor the postponement of the trustees sale had come through, Hope and I went to court to plead her case. To both of our surprises she was granted a temporoary restraining order forbidding Ocwen to foreclose for another 60 days. We filed the document in all of the right places to get the foreclosure stopped and notified Ocwen's local attorney. As you might imagine noone was very pleased with this. The attorney called and informed me that I had no right to stop the trustee sale, I politely informed him that it was my client who had pled for the restraining order and the Adams county Judge who had granted it, therefor much as I would have liked to take credit, I could not. He wasn't amused.

Well we went right to work badgering Ocwen to accept that offer. Then, to our dismay, the buyer pulled out of the transaction saying it had taken too long to get approval. So we put it back up on the market and got an offer within a few days for more than the last offer and it was from a well known local agent and the buyer was a family member. WOW! We could not believe our luck adn quickly got a HUD and submitted it to Geeta, along with a termination of the previous offer. We requested a substitution of buyers which was denied; so we had to resubmit every doc- again, who cares about those trees?For the next 2 months we pushed, we shoved, we begged, we pled and we threatened, all to no avail. Geeta continued to promise approval by Friday and we continued to have no idea as to what Friday she was actually referring. By now buyer was getting nervous and we were frustrated but our next big break came when Geeta went on vacation. After much whining and complaining we managed to get a manager in India who reviewed the file and discovered that Geeta had submitted the file inocmplete. He resubmitted the file to Fannie Mae.

In about a week we received approval for the short sale on a Thursday morning. Excellent news right? Not so much. The buyer decided she didn't want the house anymore and Ocwen foreclosed on the house the same day they approved the short sale. I had no idea what to do- so I called the attorney owner of my favorite title company- First Integrity Title (yep that's a plug for them). He counseled me to request that the foreclosure sale be rescinded. Well that did it- Ocwen India had no idea who or what rescinding a foreclosure sale was so we finally got the file transferred back to Ocwen US!! We requested that the sale be rescinded and meanwhile put it back on the market and started praying.The sale was rescinded and we got another offer, this time it was a cash offer which was darn lucky as the scheduled closing was in less then 2 weeks. I called Ocwen US and explained the situation and once again asked for a substittution of buyers, which I was once again summarily denied. I was also informed that the sale had been rescinded and the approval letter signed for the first buyer and that they, Ocwen,wouldn't sell to the second buyer, who was actually the 3rd or 4th buyer we had procured for the property. This was interesting as the net to the bank was exactly the same, as was the closing date and all other terms. The only things that were different: the buyer and the fact that he was paying cash, which we all know made him a safer bet from the get-go.

After a sleepless night I got up and compared the 2 offer contracts to see if I could ferret out what was causing Ocwen to push back. I couldn't see anything different except buyer number one was named something on the oreder of Suzy WASP Sweetheart and buyer number 2 was named something on the order of Jose Fernando Marquez. HHM, I thought and then I called the buyers agent- Lupe and said," I think your client is being discriminated against." She and I talked and decided that if Ocwen declined to sell the property to him he should probably file a Federal Fair Housing complaint against Ocwen and Fannie. Since I love being the bearer of good news I called the negotiator at Ocwen and the foreclosing attorney and informed them both that if they didn't sell to the current cash buyer they probably ought to brace for a federal Fair Housing Claim. Well that got everybody but the attorney's attention (he once again scolded me). However, by the end of the next day we had a new approval letter and I had talked to the regional manager at Fannie as well as numerous other suits. the closing went off without any further troubles after a mere 18 months adn numerous offers. My commission for this little exercise?

Less than $750, as I had conceded the rest to help my client get to the table. But it was worth every minute to get her to the table and to have the opportunity to beat the bank that was so intent on simply taking the proeprty back, without any regard for the people involved. My advice to anyone facing a short sale with Ocwen? RUN - Run and Hide. And if youare intent on pursuing it- cozy up to a nice attorney adn settle in for a really long but interesting ride.

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