Sep 27, 2012

Tip 37-2012: Why Do Short Sale Lenders Continue To Foreclosure While Negotiating a Contract (Part 2)

Last week's Tip 36-2012 discussed the continuing practice of many short sale lenders simultaneously negotiating a short sale contract while continuing to proceed to foreclosure on the same property. This results in the attorney or realtor negotiating the short sale always having to stay on alert to attempt to stop the foreclosure while the short sale negotiations are dragging on.

In Virginia, foreclosures are very easy to process and complete (No court approval is necessary). As a result the lenders may, during the short sale negotiations, start and subsequently stop several scheduled foreclosures before the short sale is finally approved.

The important thing to remember is whoever is negotiating the short sale must continue to monitor the lender's foreclosure activities. It usually becomes the job of the attorney or realtor to request postponement of the foreclosure.

The following is a list of what the seller, realtor and attorney need to do to monitor and stop foreclosures:

1.The Seller needs to open all mail from the lender and the possible foreclosure trustee (usually a law firm).

2.The Seller needs to answer all calls from the bank (refer the bank to the attorney or realtor negotiating the short sale).

3.All parties should continue to review all legal foreclosure advertisements in the local papers.

4.The Seller's short sale representative should continue to ask the lender's short sale negotiator if any foreclosure activity is currently scheduled.

The good news is the lender will normally stop the foreclosure, but unfortunately not always.

Contact me if you have questions.  

William D. Tucker, III
Tucker Griffin Barnes P.C.
Chaarlottesville, VA (434-973-7474)

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