Short sale with Wells Fargo

**eduong68** · 03-02-2009, 11:30 AM

I represent the buyer on a short sale with Wells Fargo bank. We are due to close escrow in 4 days. Originally, when a HUD I was given to Wells Fargo the property tax default did not show us. When we did a Prelim Title a $14k property tax was in default. The listing and escrow had fax Wells Fargo several time the last 9 days trying to get their approval to pay for the property tax. Up to now we still have not heard back from Wells Fargo today is Monday and we are to close this Friday. Do bank usually pay for the property tax pass dues? and what happen if they don't respond back to after Friday?

**strategiclm** · 03-03-2009, 06:58 AM

Your post is a bit hard to follow due to typos and such. But the basic question is will Wells Fargo pay the past defaulted property tax.

Lenders will always pay property tax. However if this additional 14k leaves them with less than their acceptable discount percentage (which varies by loan, and loan type) then they may not on this deal. In that case somehow you would need to come up with more more money for the lender.

You don't want to be just waiting to see if they will get back to you. Whoever is handling the short sale needs be be calling the loss mitigator several times a day until they reach them. If the loss mitigator can't be reached after multiple attempts, ask the service rep who answers the phone for an "escaltation" to speak to the supervisor.

The main point here is that if we just wait for a response it may not come in a reasonable timeframe. It is our job to make it happen.

The problem here started because the taxes where not checked before the short sale package was sent to the lender. It is usualy easy to check with a simple phone call to the appropriate county office - this should ALWAYS be done to prevent this sort of problem which will happen often.

But at this point simply faxing something to the lender and then waiting is not the way to get things done.

Chris

**agentsranking** · 03-03-2009, 08:03 PM

This is the reason that it's not a good idea to represent sellers in short sales unless you know what you're doing. There is no reason for $14K in taxes to turn up a few days before closing. You should have checked county records before even listing the property to know if there were delinquent taxes. With a short sale it seems like there are almost always delinquent taxes. Regardless, what you need to do now is harass Wells Fargo on the phone until you can talk to someone. Don't leave messages or send them faxes; it will never get done. Also, you need to notify the buyer that there may be a delay in closing so it doesn't come as a big surprise the day they are scheduled to close.

**eduong68** · 03-05-2009, 07:21 AM

Thank you for all your reply Wells Fargo did eventually call two days prior to closing and agreed to pay for the property tax.

I have another question now. My buyer now fear that her company maybe laying off people and she may be one of them. She now wants to back out on the deal in which she just sign loan docs yesterday. She has 10k deposit with Escrow. Will she lose all this deposit if she back out not going forward?

**jennsellsfast** · 03-07-2009, 02:58 PM

Originally Posted by eduong68

Thank you for all your reply Wells Fargo did eventually call two days prior to closing and agreed to pay for the property tax.

I have another question now. My buyer now fear that her company maybe laying off people and she may be one of them. She now wants to back out on the deal in which she just sign loan docs yesterday. She has 10k deposit with Escrow. Will she lose all this deposit if she back out not going forward?

O boy, what a mess!

I'm sure her due dillegence and financing contigency are expired by now, it looks like she will lose it. Short sales are always a mess! Good luck Eduong!