Is your Gainesville Short Sale Lender Delegated? You may be surprised to find out what “delegate” means in short sales.
To come straight to the point, the word “delegate” in short sale literally means what it is, to entrust to another.
You may be making payments directly to Bank of America, Wells Fargo, or Nationstar, but that doesn’t mean that they are your lenders. In this case, they are referred to as “servicers”. This is because, even though these lenders have lent you the money, they may have subsequently sold your loan to an investor which legally transfers their authority over the loan to the new owner—the Investor.
Your lender is now stripped of the power to approve the short sale.
What happens is that these servicers have been assigned by the investors to receive the mortgage payments, which is why you are still making payments directly to them. They are paid to do so.
You may have wondered why this happened without your knowledge. It is because when your note gets sold, they do not need to notify you. It is only when your servicer is changed that you must be notified.
The investors hire the servicers to keep them from being involved with the day to day operations of payments and other servicing details. The investor could be Fannie Mae, Freddie Mac, Pension funds, Insurance companies, and etc. Although majority of the notes are presently owned by Fannie Mae or Freddie Mac. Ask your Gainesville Short Sale Agent to lookup your loan for Freddie Mac or Fannie Mae
By delegating, these investors assign authority to the servicers to approve short sale on their behalf. However, this is grounded by certain parameters that vary for each investor.
A simple example: An investor authorizes the Servicer to approve a Gainesville Short Sale given that the loss they incur is less than 35% of the loan value. The borrower becomes 30 days delinquent on payments, they live in the property and with their debt plus mortgage payment they are 31% of gross income. Should the short sale fit within these parameters, then the Servicer can issue the approval without asking the investor.
When you are requesting a Short Sale request, it is almost always made to the Servicer. And if the Servicer is delegated, they are able to approve the Short Sale without going to the Investor which saves a lot of time. The time saved is significant— as it easily cuts the Short Sale time for approval in HALF.
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Call Stephanie Anson today at 352-260-0153 for a confidential phone interview regarding your options.
Please seek legal advice. This information is for informational purposes only.