Loan Mods and Short Sales Don't Mix With Lenders

Ever call the lender and wonder why the file has still not been assigned to the short sale department? Ever wonder why a lender will order a second BPO or appraisal (even if one had been done last week) when you finally get a loss mitigator assigned? I've run into this problem a few times and have finally found a major (not only) cause of this situation.

First off, lenders will not let a homeowner pursue both a loan modification and a short sale simultaneously. They'd rather eat up 60 days of a homeowner's NOD time, ruin their credit and cause further mental anguish by pursuing a loan mod only to deny it. Thus leaving the homeowner with little time before the Trustee's Sale to pursue a short sale.

Anyway, many homeowners first pursue a loan modication in an effort to keep their home and then realize that a short sale is their only remaining option. Lenders open up a loan mod file and then will often NOT close that file unless directly ordered to by the short sale department or/and the homeowner. You will drive yourself crazy when you call in to talk to the short sale department and the customer-service rep says it shows the file is still in loan modification when you've been trying for weeks to get a loss mitigator assigned. MAKE SURE the lender closes out the loan mod file.

By the way, lenders will sometimes order a BPO based on a loan modification request. This BPO often does not count when the file is handed over to the short sale dept. and, hence, another BPO is ordered. Two different departments that don't talk and start from scratch when they get a file.