I made an offer on a Overland Park luxury home that is a short sale 2 weeks ago. The seller's lender, Wells Fargo, has the property and they have already approved the seller for a short sale. How much longer should I expect to have to wait to hear something from Wells Fargo? Wells Fargo has requested an updated HUD statement and they requested the seller and I complete an Arms Length Transaction affidavit.

Question: I made an offer on a Overland Park luxury home that is a short sale 2 weeks ago. The seller's lender, Wells Fargo,  has the property and they have already approved the seller for a short sale. How much longer should I expect to have to wait to hear something from Wells Fargo? Wells Fargo has requested an updated HUD statement and they requested the seller and I complete an Arms Length Transaction affidavit.
David K. from Overland Park, Kanas


Answer: You might continue the looking process in case Wells Fargo does not issue an approval soon. It sounds like you maybe in a hurry. Even if the sales price was previously approved by the lender it's possible that Wells Fargo may require another appraisal or BPO. It will depend if the seller's loan is a portfolio loan, investor loan, as a 2nd lien, and has PMI insurance. The short sale may have been approved by Wells Fargo, but there maybe other entities that need to approve the short sale.

Wells Fargo just wants the loan off of their books so they will have different branches working on the defaulted mortgage loan. One branch may offer a Deed in Lieu of foreclosure, even in the middle of a Short Sale. Additionally another branch of the bank may offer a Deed fin lieu for a lease. The lender basically leases the home back to the seller.  

The HUD statement should have been provided to the lender within days of your contract acceptance. All Short Sales have to submit a HUD upfront with any offer so that's no indication of progress. The Arms Length letter also is a standard form that most lenders require but doesn't show it is progressing. 

Hopefully your Realtor will get the approval letter soon but expect to close in 4 to 6 months or possibly longer and while you're waiting, continue to look at "genuine" bargains, bank owned fixer uppers. I find that short sales on homes with larger loans and multiple investors take longer to negotiate.


Hope this helps David.


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