JP Morgan Chase – Short Sale

JP Morgan Chase

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.

Who™s Eligible?

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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