Postpone a trustee sale in the blink of an eye

During a discussion with a banker, at a rather large lending institution, about a short sale we had been working on for many months I was told “this is your last shot, if we do not close next Wednesday, then the house sells at the trustee sale on Thursday”. My response was simply “Thanks, I’ll do my best, no promises”

Now don’t get me wrong, my client had not paid his mortgage in over 12 months, we had presented two previous short sales that had both failed due to lack of financing, and now we were moments away from loosing a third sale due to a subordinate lien that needed to be released prior to closing.  If I were him, I would be impatient too

Come Tuesday of the following week, one day before the deadline, the lien was still not released even though money was paid by the client to release the lien.  The banker representing the subordinate postion was unreachable by phone and email.  The paperwork was likely completed but not filed publicly which would result in us not being able to close.

Rather than panic, I wrote an email and followed up with a call to the banker accepting the short sale and explained everything and simply asked for one more week to allow the lien to release.  The response was a dramatic pause followed by ” I don’t know how willing the lender will be to postpone another sale, the buyer can bid at the trustee sale tomorrow”

Understanding the bank really did not want to sell this property at auction, I did what I knew would get his attention.  I sent every email, letterhead, or supporting documentation I could find that showed that the lien would be removed and that funds were already distributed for that very purpose… Painting the picture that in a few more days the bank would be paid for this property instead of running the risk of owning it when no one shows up at the auction.

30 minutes later I received an email with a letterhead attached that postponed the trustee sale for 30 days.  More than enough time to close and preserve this asset.

Lesson Learned: Banks do not want to foreclose and auction your home or any real estate.  They experience massive losses that they will do almost anything to avoid.  The skill lies in not getting caught up emotionally in what the banker says, as he has a job to do and over time will put pressure on guarantors in default, and also understanding what the banker needs in order to postpone any auction date.  Unfortunately its not as simple as calling to say please… Understand the bureaucracy you are woking with… Every banker you speak to answers to someone and must justify any and all of his actions. If they are not able to support their decision then they will auction your home… Give them the documentation and support they need to work with you, not against you and you will win.