Profile picture for user6074916

What does in the "underwriting process" in a short sale mean?

We are buying a short sale and have not recieved final approval from the 2nd bank (Wells Fargo), but we have from the first bank (Bank of America).  Our realtor, who works with the listing agent says we are under review and in the underwriting process...What does this mean? We are going into our 4th month of waiting. Any advice or insight would be great! 
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
August 14 2012 - US
We think we've answered this question for you!
 
 

Replies (4)

The term short sale is a misnomer, especially when it involves two lenders. What happens is the 1st trust lender will make an offer to the 2nd trust lender to agree to the deal. Usually the 2nd trust lender will only geta few thousand dollars and are in no hurry to take a loss. I hate to say this but a lot depends on the quality and knowledge of the listing agent since that agent is the primary contact with the banks. Short sales have gotten better in the last few months but the biggest issue is the listing agents experience and being proactive.This is a prime example of the old saying the squeeky wheel gets the grease. The agent should be calling every few days.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
August 14 2012
In a nutshell, you are closer to the end.  An underwriter is the individual in the lender's office  who approves or turns down loan applications, the underwriter reviews the package, the appraisal,  etc and evaluate the risk of accepting a short sale.  Gordon puts it correctly, if you have a good agent on the other side, it will make a world of difference.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
August 14 2012
Profile picture for B Mike West
You have two lenders who are trying to minamize their losses.  The first will only agree to allowing the second to get a very small portion of that loan amount.  The second always wants more.  Do not be surprised if they come back to you asking for more money. They are also likely to ask the seller, listing agent, your agent and any one else they can find. 

You did not say where in the country the property is located. In California, if the second agrees to approve the short sale they may NOT be able to go after the seller for a defficiency judgement a year or two down the road. It depends on if the second was a purchase money loan or not.  The second lien holder is looking at all of these factors VERY carefully.  They may not approve the short sale even months after the shot sale process has started.

Trying to buy a short sale where there are two loans with two different banks complicates the process by a factor of four, or more.  Be thankful that Wells Fargo is the servicer on the second.  They are not as difficult to deal with as many others.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
August 14 2012
Profile picture for user6074916
Hello all- Thanks for all your advice.  The 2nd bank actually countered about a month ago and we accepted right away since they only asked for $1500.  The property is located in GA.  I know what an underwriter in a mortgage loan is, but we haven't applied for a loan yet.  Is it still the same thing in a short sale?
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
August 14 2012
 
  • Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.
Related Discussions
What is CFR 206.125, and what does it mean for the buyer?
Profile picture for Robin A Schwartz, GRI, ePRO
Latest reply by Robin A Schwartz, GRI, ePRO
June 17 | 10 answers
Purchase of condemned homes
Profile picture for zuser20140607214558610
Latest reply by zuser20140607214558610
June 07 | 8 answers
Homepath First look program's fraud - southern CA
Profile picture for matviarr
Latest reply by matviarr
June 05 | 12 answers
Auction.com and williams and williams auctions--what has been your experience?
Profile picture for JuliePisciotta Holmwood
Latest reply by JuliePisciotta Holmwood
May 23 | 61 answers
forclosed houses
Profile picture for Dunes ..
Latest reply by Dunes ..
May 20 | 9 answers
Mortgage Rates
 
Be A Good Neighbor

Zillow Advice depends on each member to keep it a safe, fun, and positive place. If you see abuse, flag it. More on our Good Neighbor Policy.