One Bay Area resident mentioned to us that when she contacted a representative in the Loan Modification department at Wells Fargo, the WF person mentioned that she didn’t qualify for a loan mod again (big surprise) but that she would qualify for a short sale. When the homeowner stated that she didn’t think she would qualify because she wasn’t late on her payments and didn’t have a significant hardship, the WF employee said that she didn’t really need a hardship. We got curious so we called WF short sale department on our own.
Turns out that the Bay Area resident had it right. We spoke with Maria in the Wells Fargo Short Sale department. She indeed mentioned that if a client has a home that is underwater in value that WF would consider this situation a hardship if the circumstances showed that the owner was struggling to make payments or would be in financial difficulty. Maria stated, “We don’t want people reaching in to their savings or 401K to pay the mortgage.”
Maria said that the bank will consider all types of hardships including growing out of the house, or not being able to manage the size of a home.
This change of policy or attitude comes as a pleasant surprise and certainly makes things easier from a short sale perspective. It appears that at least some of the banks have become more tolerant about what constitutes a hardship. Have the banks somehow taken the Tin Man’s heart? Hardly but at least this offers a small step in the right direction.