I have been getting a lot of emails and questions that agents are noticing some changes with Wells Fargo short sales, especially FHA/HUD backed properties. They have made some changes and have gotten stricter on some of their policies. First of all, if you are going to be in a Wells Fargo short sale, please be advised that it is going to be a 90 day process at a minimum , due to their increased volume. You will have to work extremely hard to get an approval less than 90 days. In the past, I have commended Wells Fargo, because I have gotten short sale approvals in a much shorter time than other banks. Recent volume spikes and some signs of organization in relation to FHA backed mortgages have left me to questions their ability to get things done in a timely fashion. Couple these with a few new changes that they have made on their end (or have always had and are now enforcing) and you have mix for a difficult ride.
Here is the good news: I am going to give some updates/timelines and things you can do to try to speed up the process, as well as navigate through it. Please note that due to Wells Fargo’s spike in short sale request, a negotiator is generally looking at every file only once every five days. If something is missing or they need something they may not look at it again for five days. Having everything in the package to Wells Fargo and FHA’s guidelines will help speed up the turnaround process. As always, if you stay on top of the short sale you can push it through much quicker. Below are five quick tips to help you speed up the process.
1. From the very beginning get all required Wells Fargo and HUD documentation from them and get all parties to sign and send them in. Prior to having an offer get all required documentation from Wells to save you from waiting for them to supply them to you down the road. Once a short sale has been opened as active in their system, you can request the documentation from them directly, and they will send it to. This will save you time so that you do not have ask for it later in the process. This can save you a week at the very least later down the road.
2. As soon as you know you are going to list a Wells Fargo short sale that is FHA backed, start the process RIGHT AWAY. This should be done prior to you even having an offer, that way, all the financials are already in and you can get an appraisal right away. This will also get you ahead in the process so you will know what the bank is willing to accept, as FHA discloses what the appraised value is.
3. Make sure the listing agreement, all required docs, are legible, readable, and you have not left anything blank. Wells Fargo has an interior audit department, and if an initial is missed, something is not legible, there is a typo, or anything of that nature, they will kick it back and this can cause a delay as long as a week to two weeks. Make sure whatever copies of docs you send in, via fax or email, are clearly legible. If they cannot make out one sentence in an entire package they will kick that document back. Also make sure you have sent in a complete package and nothing is missing.
4. Send in updated documentation every month. The process can take 90-120 days in some cases so when you first turn in the package, 60 days from then you will be required to send in updated pay stubs and bank statements. Every month that goes by, it is better to just send in the updated docs to save you the time of it being requested from you, and then you waiting another 5 days for the negotiator to verify that you sent it in. As always make sure everything you send in is verified, and you make them notate it on the active file.
5. On all offers put settlement to occur “30 days from short sale approval”. They will require you to do this, so you might as well do it up front and save yourself 5-10 days turnaround.
These are five quick helpful tips to help you cut the turnaround time down. I will have five more for you next week! If you are interested in taking our short sale certification course that we’ve developed ,in conjunction with all major lenders and hundreds of closed short sales, then please sign up for our newsletter, and we will email you the upcoming courses.