When we talk about stopping a foreclosure sale, there is one key thing that you need to think about other than getting the lender to stop the sale, and that is verifying that the sale was stopped. This is something that often gets overlooked with terrible consequences.

Imagine that your sale dates in your area are every Friday, and the loss mitigator told you on Thursday night that yes, indeed the sale has been stopped or postponed. You relax knowing that you have more time to work on this and then you don’t have to tell the homeowner that their house went to sale. Next thing you know the homeowner’s calling you Friday afternoon and yelling at you because you didn’t tell them that their house went to sale. Bad situation!

You need to try and figure out all of the different foreclosing attorneys or trustees that conduct the foreclosure sales in your area, or learn where you can verify whether or not the sale was stopped. In Washington state we know most of the foreclosing attorneys, and we also have access to their websites to see whether or not the sale is been postponed. After the loss mitigator has told us that they have postponed the sale we always contact the foreclosing attorney’s office and confirm that indeed the sale has been stopped. If not, we let the foreclosing attorney know that the loss mitigator has said they will stop the sale and we also immediately contact the lost mitigator and let them know that the sale needs to be stopped because it has not yet. You need to be very proactive with this, because the loss mitigators are so busy that they will make mistakes.

Set up a system starting now where you have the contact information including phone number and website address for whoever is responsible for conducting foreclosure sales in your area.

This will save you many headaches.

David Corbaley

This is a very common question, and here’s the scoop.

The best way to stop a foreclosure is to submit a complete short sale package. COMPLETE short sale package, not just an offer, not just a net sheet, not just a hardship letter… a COMPLETE package! This will get the short sale process started, and usually if you can get the filed opened and assigned to a loss mitigator, that person will (in most cases) have the authority to postpone or stop the foreclosure sale in order to negotiate the short sale. If the sale is only a week or less from the day you acquire the property, then here are a few helpful hints to speed up the process. First of all, only meet with the homeowner if they have a complete package for you (or very close to a complete package). Here is what they need to provide you:

-         last two months pay stubs

-         last two months bank statements

-         last two years tax returns

-         recent mortgage statement (loan number and phone number of the lender)

-         hardship letter

When you meet with them, help them fill out the financial form.

Now when you get back to the office, call the lender and ask them for a fax number for the authorization to release AS WELL AS a fax number for the short sale package and a telephone number (direct number) to loss mitigation. Now you fax the authorization to release as well as the complete short sale package. Follow up that day, then the next day, and every day thereafter to push the file and work to get it assigned to a loss mitigator and ask everybody you speak with to postpone the sale since there is now a complete short sale package on file. This is our strategy for getting a sale postponed if the sale is close.

Good luck,

Marty Schulting

Postponing a sale
Why would a lender postpone sale? This is a question that I’ll be answering in detail today. There are several reasons the lender might postpone sale, the obvious one being that they do not want to take the property back. We all know that lenders are in the business of taking payments, not managing properties. If you give the lender a valid reason why they should postpone a sale, many times they will, even if you don’t manage to make initial contact with them until just days before the foreclosure sale. The primary tactic used in getting the lender to postpone sale is submitting a valid purchase and sale agreement. If the foreclosure sale date is very close, you may want to be prepared to send several offers very quickly. What I mean by this, is when you submit a low offer and it’s only days before the foreclosure sale, if they decide that your offer is too low they may reject it. If this happens, and you have a backup offer with a higher price ready to submit, you may still persuade the lender to postpone the sale. Additionally if the foreclosure is imminent you may want to submit an offer that is higher than you would want pay simply to encourage the lender to postpone sale. This is a highly advanced tactic, and should be used sparingly because it may backfire. If this tactic does work for you and you get a sale postponed, you will now need to approach the lender with a lower offer and explanation why your offer changed. What we usually say is that we had time to do a more in-depth inspection and uncovered many more issues with the property. This seems to work quite well.
Remember, the lender will most likely do anything that they can to avoid the foreclosure sale. They want to work something out so they don’t take another REO (Real Estate Owned by the bank) into their inventory, they certainly have enough of them already. Be creative and know that you CAN get a sale postponed, even if it’s only days before the sale. Keep in mind that what I’m talking about here is not meant to be used when negotiating the short sale, only when you first get a deal that’s close to sale. These are tactics used to stop a sale when you first make contact with the lender. I’ll be covering postponing sales while negotiating in a later post.

Cheers,

David Corbaley