Can a foreclosure on a property be reversed back to a short sale?
August 24, 2010 by Mike Moulton
Filed under General, Weekly Tips
This week on AskMike, Mike Moulton discusses a recent real estate deal involving the reversal of a bank foreclosed house back to a short sale status. Mike discusses the deal overview, the lender involved, and the current status of the deal.
Thanks to Pam from Michigan for writing in.
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Take care and happy investing, thanks for watching!
Mike
Can a foreclosure on a property be reversed back to a short sale? from 2009 : Today is 11/03/2010 Were you able to have the foreclosure reverese? My parents are in this same situation today. My parents were trying to short sale, we posponed several foreclosure dates, my parents recently submitted offers to Wells and they said at 8am this morning…we are going with the foreclosure…11:30 and the broker calls back and said they are still on for the short sale. However the trustee sale stated the house is already been sold to the bank WElls. So, were you successful in returning your sale from foreclosure back to a short sale status? thanks.
Hi, yes it can be reversed. I’ve been successful about 4 or 5 times in doing this. It takes a lot of communication (which you control) between the loss mitigation department at the lender, the foreclosing trustee (attorney), and yourself. When it gets reversed its called “putting it aside” and they can do that. When put aside, it allows the short sale to occur and then if the deal doesn’t come through then they can just foreclose it again without going through the entire process. All of the ones that we got “put aside” were done during the 10 day redemption period (10 days in NC). What you need to do now that’s its been sold is contact the loss mitigator at the lender and escalate to their manager. Tell them what has happened and that you have a contract for an approved price and net to the lender via the short sale and it was a mis-communication between the trustee and the bank and it needs to be reversed to let the sale happen. One key element for you to answer….did your parents have an approved payoff letter from Wells approving the short sale? That will make a big difference. If the offer your parents went to contract on didn’t get submitted or go through the entire short sale evaluation process at Wells then you will not have success. Good luck! Mike