Even though I have represented many Short Sale clients in Chandler, Gilbert, Tempe and Ahwatukee, Arizona, I ran into a different twist on one this last week.
I have a buyer who entered into a purchase contract for a short sale house. It had previously been a rental. Interesting enough, my buyer is a Realtor from another state moving to Phoenix. I feel fortunate she asked me to represent her on this transaction.
Over approx a 2 month period, the somewhat typical sequence of short sale events were occurring:
- The purchase contract was forwarded on to the mortgage holder (bank) for approval
- Seller also submitted their “Hardship” paperwork.
- Listing agent contacted the bank to follow up only to find out 1 & 2 above couldn’t be found. They said they never received the fax.
- Resubmitted everything again.
- Bank requested the Broker Price Opinion to be done. This is a valuation process to determine for the banks negotiator the contract price is reasonable for the market
- Wait
- Wait some more
- Waited for 2 months
This is where things changed from typically to unusual. The seller filed Bankruptcy. At this point since the contract on the related asset (home) & debt (house mortgage) is under the control of the Bankruptcy court. The seller’s bankruptcy attorney filed a motion asking the court to approve the sale of the home to my client. The hearing was this week.
I decided to attend it. While Bankruptcy court is not exactly the Perry Mason, Matlock stuff you see on TV, I always fancied myself as a wannabe “legal eagle” so I was more curious than anything. I was told by the seller’s BK attorney; most likely the mortgage company would not dispute the sale because they don’t want the house back as a foreclosure and our purchase price on the contract was a fair market price. If the bank had wanted to, they could have tied this home and mortgage up in BK court for some time. At least longer than my buyer client wanted to wait.
The bank (Chase) did send an attorney to ask the judge for more time to evaluate the short sale contract. The judge indicated there was no formal objection filed and was on the verge of postponing the sale when I found myself standing up near the back of the court room raising my hand like a polite school kid in class. The judge motioned me forward. I testified Chase had already had 60 days to evaluate the short sale contract. I found myself boldly asking the judge in my best Perry Mason voice “Isn’t that long enough? That truly is “representing” the best interest of my client.
Decision: Judge “finds” for the Debtor (seller), house sold to my buyer, she is happy. It will close in about 16 days and she can move in when she arrives in Phoenix on 4/30.
they provided the insurance on the fraudulent morgage bundles that the companies were pushing. it’s a confusing muddle, and it makes me sick when people blame the average joe for taking the risky loans. it was this unregulated sale & purchase of these morgage bundles (which AIG lost money insuring).
People will differ with me, but I think that the President is trying to look out for least of us here at the expense of fiscal discipline. You can armchair quarterback about how this fight should’ve gone down, but the GOP has made clear that they don’t care about spending has long as they get their goodies. I’m keeping the faith for now and I predict you will see the fight renewed in 2012.