US Bank Getting Less Cooperative on Short Sales

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EDITOR’S NOTE: SMALL WONDER. US Bank doesn’t own the obligation, note or mortgage. How could they approve a short sale without it being a scam? Lawyers Beware! If you have short-sales or modifications that your clients think are done, you better think again. You might be a moving target for malpractice claims or discipline. Any satisfaction issued by a disinterested party out of the chain of title is a wild deed.

You should take corrective action by getting acknowledgments from clients that they were told and proceeded anyway or file quiet title actions using the documents that were used. If someone comes in to challenge then you have slander of title and fraud to claim.

In the meantime, without going into names, here is a sample letter that is going out from one office, much like others I have seen:

“We will no longer be able to negotiate short sales for conventional mortgages or 2^nd mortgages with US Bank as the lender.  The only US Bank serviced mortgages we will work with must be FHA or MHFA mortgages.  The way to find out if it is conventional, FHA or MHFA is that it is stated on the mortgage signed by the seller, or the seller can call US Bank and find out.

US Bank has become continually less cooperative in the short sale processes.  The time frame has moved upwards of six months for potential approval.  They do not have the staff to deal with these.  They are uncooperative at best and simply unreasonable and unknowledgeable at the worst.  We have developed sources in management for escalation.  Yet, when we use those sources, the files still go ignored in most cases.

In the event that we are able to get a short sale through the US Bank system, the approvals commonly require a large cash contribution or promissory note from the seller.  When that is on the first mortgage, the seller then is better off, in most cases, to allow the property to go through foreclosure and therefore chooses to not close.

Again, if the seller’s mortgage with US Bank is FHA or MHFA, we can work with the file due to the US Bank contacts we have that work with those specific investor mortgages.  If the seller’s US Bank first mortgage is conventional, or any US Bank 2^nd mortgages, we must refuse the file.

Please make sure you do not have a seller call for consultation in those cases so they will not be disappointed we cannot take the appointment.   As the Realtor, you can either take the listing and work with US Bank yourself if an offer is received.  Or, as many agents have decided, you may want to not take the listing at all based on the small percentage chance it will ever close.”

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