Chase / EMC / WAMU Short Sales
If one company™s short sale process has changed more than any other it would be Chase. Chase™s short sale process hasn™t changed so much in terms of administrative process, but more from a corporate stand point. You see, after Chase acquired Washington Mutual their primary task seemed to be figuring out how to transfer hundreds of thousands of WAMU short sale accounts into the Chase data base.
If your mortgage originated with WAMU and you were attempting a short sale during this transition you would have experienced long delays and great frustration as the WAMU-CHASE database transfer was anything but smooth. Chase representatives happily report the transfer is now complete and files are now processing smoothly.
The Chase / EMC / WAMU Short Sale Process – Getting Started
The first step to initiating a Chase Short Sale is to list the home with a Realtor who specializes in short sales and has significant experience with this lender. Your agent will be critical to the success of your transaction and while many agents have begun marketing themselves as short sale specialist, few of these individuals possess the knowledge and experience required to warrant this title and it is imperative that you select a true short sale specialist to represent you in the sale of your home.
The listing of a short sale is initially quite similiar to the listing of a traditional sale, however, the your lender will require the following additional documentation; the previous two years™ tax returns will be needed (these should also include W-2s as well as tax schedules), paystubs for the previous 2 months, your previous 2 months™ bank statements for all accounts, borrower financial form (a detailed list of all of your income, expenses, loans and bills), a hardship letter (why you are no longer able to afford the mortgage), and a third party authorization (gives your lender permission to speak with your agent about your account).
Why are these documents needed?
Just as the you were required to apply and submit documents to obtain the loan, the bank is now going to require that you apply and submit proof that you can no longer longer afford the loan. The bank requires these documents and uses them to help better understand the borrowers financial situation and to determine if the borrower should be granted a short sale based on their circumstances. They are also going to want an explanation of the circumstances including what happened to put you, the homeowner in the hardship that you are in, ultimately causing you not to be able to afford your payments.
To qualify for a short sale Chase will want to see a clearly demonstrated œfinancial hardship. Acceptable financial hardships include; relocation, loss of a job, payment increase or mortgage adjustment, business failure, reduced income, to much debt, illness or death, divorce, damage to property, incarceration, etc. In any of the fore mentioned cases, Chase will typically agree to a short sale and will accept this as payment in full on the loan (ie. the bank will not demand cash or a promissory note).
* Note if your payments are current, there is very little reason for the lender to consider a short sale. If your payments are behind, then a lender may be more agreeable to negotiate with you.
Thus the documents listed above will enable you in your efforts to successfully present a clear case to Wells Fargo that you are eligible and deserving of a short sale.
How does a short sale affect your credit?
The damage to a Seller™s credit is far more severe if they go through foreclosure or give the lender a deed-in-lieu of foreclosure. The points lost on your FICO score may be as follows:
- Foreclosure or Deed-in-Lieu of Foreclosure
Both of these solutions affect credit the same. A sellers can take a hit of 250 to 280 points. This means if a seller™s FICO score before foreclosure is 680, it could dip as low as 400.
- Short Sale
The damage to a credit report from a short sale is much less drastic and in the range of 80 to 100 points. The hit will be indicated as a œsettled account or as œpre-foreclosure in a redemption status, or if your real estate agent knows what they are doing and is successful they may even be able to convince the bank to agree report the account as œpaid in full.
The Chase / EMC / WAMU short sale application consists of the following:
|Listing Agreement||Most Recent Bank Statements|
|3rd Party Authorization||Two Recent Pay Stubs (most recent)|
|Hardship Letter||Borrower Financial Form (click here to download)|
|Two Years Tax Returns (most recent)||IRS Form 4506-T|
While Chase / WAMU / EMC has a new division entitled List Assist that advises homeowners submit the short sale application as soon as the property is listed, this only applies to borrowers who are eligible for the government sponsored HAFA Program. Never the less, we’ve found this approach to be counter productive and have an alternative listing strategy we employ with our client’s listings. We share this strategy with our clients during the initial listing presentation.
That said, the short sale application needs to be faxed to 866.220.4130 or mailed to Chase Fulfillment Center P.O. Box 469030 Glendale, CO 80246. We suggest that homeowners allow us to fax the application in our their behalf as Chase often fails to log these files requiring that they be resent multiple times. However Chase has hired additional support staff and they are getting much better and have significantly decreased their short sale processing time as a result of these new hires.
Once an offer is received we will submit this to Chase and they will then order a BPO, or Broker Price Opinion on the property. The BPO is an appraisal or assessment of the home™s current market value and is a key step in the short sale process.
Once the BPO valuation is returned the negotiator will submit the entire package for review and short sale approval. While Chase suggests their standard processing time is 30 days, they are currently averaging 45-90 days with this vary depending on the type of loan, whether or not the loan is insured with a PMI policy, if there are any additional junior lien holders, the bank™s current work loads and the number of files the negotiator is currently working. Files that are set to close before the end of any given month receive priority treatment.
You can read about Chase / EMC Short Sales directly from their website: Chase Short Sale
Have a Chase, Washington Mutual, or EMC Mortgage and need to do a Short Sale?
If you have a loan with Chase, WAMU, or EMC and are considering a short sale in Columbus, Ohio or the Central Ohio vicinity make sure you are working with a real estate agent who is a short sale specialist, while many agents claim to be proficient in these types of sales, few possess the knowledge and experience to accurately call themselves short sale specialist. We have a working relationship with Chase, and contacts within the bank’s executive offices whom we can call upon to ensure our client’s short sales are not only being processed in an expeditious manner, and ultimately that they are approved under the conditions and terms we require.
Chase is participating in the Home Affordable Foreclosure Alternatives Program, or HAFA and eligible homeowners may be entitled to $3,000 in financial assistance to help with your relocation expenses.
Please call us at 614.332.6984 to address any questions you may have and to discuss how we might assist you!
The Opland Group Specializes in Real Estate Sales, Luxury Home Sales, Short Sales in; Bexley Columbus Delaware Downtown Dublin Gahanna Grandview Heights Granville Grove City Groveport Hilliard Lewis Center New Albany Pickerington Polaris Powell Upper Arlington Westerville Worthington
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