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by: Alison Harvey employee of Scottsdale Law Group

The only constant in the short sale world is change. Here at the firm we have a person on the staff who spends most of her day on foreclosure postponements. She is in touch with servicers and investors every day requesting postponements and has a wealth of experience. As a result she is very in tune with the process, the subtle changes that occur and the trends taking shape. To better serve our clients and keep are realtor partners up to date on what we are seeing please review the following information.

Investors are not giving much weight to requests to postpone foreclosure sale dates on properties that are not under contract. There is a  chance they will postpone the sale on their own but it is entirely up to the bank. We do see this happen but the postponements always happen at the last minute and are not usually a result of a request. More often than not it is because the file status at the servicer is incorrect.

One thing we are seeing more and more is that investors might be inclined to postpone a foreclosure and a servicer will discourage the investor from actually doing it. Both seem to be able to influence the decision on whether to postpone the foreclosure sale and it varies as to who actually makes the call, so contacting the investor is not a sure fire way to get a postponement though it will work some times. Investors are now experiencing a high call volume as well and are starting to mitigate a bit by requiring an authorization to be sent in 72 hrs prior to a foreclosure sale date. This is obviously a way for the investor to decline to speak with you at all and also gives them time to correspond with the servicer prior to making a decision. Most of the time 

If you are going to submit an offer on a property at the same time you are going to request a postponement most lenders are requiring the offer to be submitted 10 to 14 days before the scheduled foreclosure sale date.  Most lenders are looking at this timeline because it gives them a chance to get a BPO if they need one and it allows time for review of the offer. Fannie and Freddie are reviewing all contracts submitted in tandem with a request to postpone a foreclose sale date and seem to have caught up to the point where they can effectively manage this process much better. It doesn’t necessarily mean they are going to give you the postponement, it means they are sticking to the guideline more and more. Most of the mainstream servicers in the Phoenix area, such as BofA, Wells Fargo ,and Chase are all on the same page and we find consistency in the actions to the degree you can expect it. The review the offer goes through is somewhat cursory and if a postponement occurs it doesn’t mean your offer is accepted or approved it just means the investor would like to review the offer more closely.

There are other servicer’s such as Suntrust, GMAC, ING, Etrade, Everhome and the like that are absolutely willing to take the home back in a foreclosure. There is very little give in their stance with last minute postponements and often times even with offers submitted and full files in the queue these servicers will not postpone. It doesn’t make sense but we see it on a daily basis.

PNC/National City Mortgage and Amtrust will not accept requests per se. Their response to a request is something along the lines of “Our system notifies the negotiator of the impending sale and it is up to them to determine whether or not we request a postponement”.

The other things we are seeing are shorter postponements i.e. 15 days instead of 30 days. Sales being placed on hold in lieu of being postponed so that if the bank wants to move forward with a sale all they have to do is take the hold off. This allows the trustee to sell the home very quickly without a lot of notice to any of the interested parties.

Please keep in mind the golden rule of Foreclosure Sale Postponements;

The INVESTOR ultimately decides whether it is in their BEST FINANCIAL INTEREST to postpone a sale, if they decide it is in their best interest, they will postpone the sale, if they decide it’s not, then they will move forward with the sale.

Just as the HOMEOWNER has decided it is in their BEST FINANCIAL INTEREST to sell their home, the bank has the right and frankly, the obligation to do the same. There are times when it’s hard to understand this from a consumer’s perspective. There are  times when the property goes to sale as a result of investor indifference, lack of communication, or organizational dysfunction but these instances are a very small minority. The majority of foreclosure sales are methodical financial decisions made by investors.