Wells Fargo will no longer be granting extensions on foreclosures to homeowners attempting to complete a short sale. The lender stated that its investors have had a number of concerns regarding the time it takes to complete short sales, and is implementing the policy “in order to stay consistent between short sale transactions”. There will be some moderate exemptions to this rule, however, Jason Menke, a Wells Fargo spokesman, said. If the mortgages are owned by the bank and investors are looking to take these properties via short sale, then an extension may be allowed if there is “some indication the short sale is guaranteed to be approved.” Menke told HousingWire that “We do allow for one foreclosure postponent provided we have a short sale in hand that has been approved, the buyer has proof of funds of financing approved, and the short sale can close within 30 days of the scheduled foreclosure sale.”
However, this does not mean that even this initial postponement is guaranteed, and foreclosure proceedings are likely to advance even if short sale negotiations are already underway. This may be due in part to Fannie Mae’s new initiative to move along delinquent loans that may be languishing without action. The GSE has promised to monitor “all delinquent loans in its portfolio and mortgage-backed securities (MBS) pool.” Servicers that the GSE finds to be negligent in maintenance of these loans and resolution of the problems with them may be fined for poor performance and penalized for failing to complete foreclosures in a timely manner.