I just closed a Wells Fargo Short Sale that is not typical. It was a nice 3 bedroom townhome in North San Jose, close to Santa Clara. The owners were divorcing and neither could afford to buy the other one out or afford the property alone. This constitutes a hardship in most lender's minds. I have closed other Wells Fargo short sales with similar circumstances. The current owners had been able to pay the mortgage but they will not be able to in the near future because of an impending change of circumstance. These owners were current on their payments, and were hoping to sell short and then finalize their divorce.
So last fall I put the town home on the market, got a good offer, and submitted it to Wells Fargo. It was promptly denied. I was told that while this was not Wells Fargo policy, the particular investor on the loan (the person on entity who purchased the loan from Wells Fargo, and hired Wells to keep servicing the loan) had a policy of not allowing short sales unless the borrower was behind in their payments.
So, my clients stopped making payments for a few months and we put the home back on the market. We got another offer for the same price and 2 months later got an approval and closed escrow in 30 days.
So here is what happened to the investor: They lost 5 months of payments of about $4000 a month, so $20,000 of missed payments for the same price of the home. Call me crazy, but that make no sense to me. Let me re-iterate:
THIS IS NOT THE GENERAL POLICY OF WELLS FARGO SHORT SALES.
So, if someone owed me money and I had the chance of recovering 70% of it, or 70% minus $20,000 I would go for the straight 70%. But maybe I am greedier than that investor.
If you have any questions about short sales in Santa Clara or San Mateo Counties please feel free to contact me.