Death of a Short Sale: Not With A Bang But A Whimper

This week I concluded negotiations with the first mortgage servicer on a short sale transaction.  I have been working on this short sale for over 6 months. Due to my clients' bankruptcy proceedings, we were unable to work with the bank on a short sale until the release-of-stay was issued by the court.  It took us two months to get the court to issue the release but then it took the mortgage company another two months to process the paperwork.

In the meantime, my clients' phone numbers were disconnected.  By a fluke, my clients contacted me via email and we able to delay the foreclosure auction just two hours before the scheduled sale by getting all of our paperwork turned in as requested.  However, due to the long delays the bank kept having us resubmit our file for review.

Finally they reviewed it.  I got a call on Thursday last week:

"Mr. Peterson, we have received your file and we are counter-offering your $80,000 offer at $95,000.  Please respond with an acceptance no later than Tuesday next week.  The foreclosure auction is scheduled for Friday next week."

I went back to the buyer and several back-up buyers and they all balked at the bank's counteroffer.

The bank proceeded to the foreclosure auction and it went up for sale today.  Let's watch and see what the bank lists the home at when it comes back as an REO property.