Below is an extremely said story written by Chris Ann Cleland, a Northern Virginia Short Sale Agent, and it’s a prime example of why short sales fall apart.

When you’re a Northern Virginia Short Sale Agent, sometimes you get deals that just break your heart.  The one I’m about to tell you about, with the kind permission of the Seller, is one of those deals.

During the month of June, I received a phone call from a Seller.  We’ll call him Jack.  Jack had found me while researching Short Sales on the Internet.  He had a property that was very much upside down and draining him emotionally and financially.  Jack is a man in his mid-60′s, on the verge of retirement.  Midway through the first decade of the new millennium, Jack fulfilled his role as an outstanding father and helped his son, a working professional with a few credit issues, purchase a home in Northern Virginia.  Jack co-signed for the loan.   Sadly, and unexpectedly, Jack’s son died suddenly of a brain aneurysm.  Distraught by the sudden death of his son, Jack took responsibility for the home, despite the fact that he was living out of state.  He rented it out for a period of time, waiting for the market to rebound and give him an opportunity to sell the home and at least break even.  After four years of waiting, and starting to miss other payments in favor of keeping up with the mortgage payment on his son’s former home, Jack needed a way out.

When I heard Jack’s story, I knew for a 100% certainty that this was a man that had a legitimate hardship.  The primary owner of the home, his son, had died.  And now, as Jack was facing retirement, he had to cut this property loose or let it drag him and his wife under.  Jack was still current on his payments and intended to stay that way since it was the right thing to do.  It was his duty as far as he was concerned.

We listed for sale at market value and got at least a half dozen offers before picking one and sending it to the bank, Wells Fargo.  It was a fantastic offer.  And when Wells Fargo got all the paperwork, their initial response was that the Seller needed to make a cash contribution.  You see, the difference between the value of the home and the mortgage balance was about $160,000.  Wells Fargo’s investor asked for a measly $3,000.  Jack accepted and we expected an approval letter was soon to follow.

Enter the mortgage insurance company.  That’s right, the folks that are there to insure the investor against full loss if the loan goes into default.  Well, after those crooks got a gander at the Short Sale contract package, they made their offer.  Mind you, this offer came through the day the stock market tanked after the USA’s credit rating with S&P was downgraded.  The offer was a) a promissory note in the amount of $75,000 OR b) $35,000 cash contribution at closing.

Jack did not have the means to do either.  Here’s a man facing retirement in less than one month.  And the mortgage insurance company for Wells Fargo is hanging his upside down and trying to get every penny out of him that they can.  Never mind that he’s been doing the right thing and making mortgage payments for FOUR YEARS after the death of his son.

Jack countered their offer to a number he could afford, which was $500 more than Wells Fargo had requested.  $3,500.  That’s a total of $6,500 between the two in cash contributions.  The counter came with a reminder of the hardship and the fact that if this was not accepted, that Jack was going to let the property go to foreclosure.  Know what the mortgage insurance company did?  If you guessed, denied the Short Sale, you are correct.  Now the mortgage insurance company has squarely got themselves in a position where they will need to PAY OUT to Wells Fargo when Jack’s property ends up in foreclosure.

Pardon me for saying so, but other families whose hardships are somewhat questionable, are skating with approvals day in and day out.  Strategic defaults.  But a generation like Jack’s, known for their sense of personal responsibility are getting raped.  This is ludacris.

Somedays, being a Northern Virginia Short Sale Agent makes you want to break a baseball bat, head to the nearest Wells Fargo and start swinging.  There’s dollars and cents and then there’s dollars and SENSE.  It’s immoral to think you can hold someone whose lost their only son tragically.  It’s immoral to attempt to bankrupt the only generation that didn’t live beyond their means on credit.  It’s just insane.

Originally posted at http://activerain.com/blogsview/2456030/what-do-northern-virginia-short-sale-sellers-have-to-fear-mortgage-insurance-companies-

Chris Ann Cleland, Associate Broker | Northern Virginia Short Sale Specialist |  703-402-0037