February 03, 2010

Problems Paying your Wachovia/World Savings Loan?

Posted to Kathy Mardiros

During one of our many Legacy Real Estate sales meetings, I learned that World Savings was one of the most popular lenders throughout California prior to acquisition by Wachovia. World held all their loans in their own portfolio meaning that none of the World loans were sold to other investors or banks.

At the present time about 40,000 customers holding these loans are a minimum of 60 days late in paying. What is Wachovia doing to help the homeowner? At the present time Wachovia has a loan modification department that wants to talk to any homeowner that is late in paying or is current on their loan but facing a financial hardship. The loan modification department may be able to help modify the loan so that the homeowner can stay in the property.

If that fails, Wachovia has streamlined the short sale process. A short sale is a situation in which the lender agrees to take less for the property than is owed. The property owner lists the property with a real estate agent (as time is of the essence, select an agent who has experience working with short sales) and the listing agent contacts Wachovia right away. Wachovia then orders a desktop or drive by appraisal on the property to get an idea of the property value. When an offer acceptable to the seller is received, the listing agent contacts Wachovia with the necessary paperwork. Wachovia will respond within a week to ten days in the form of a pay off demand as to the terms and conditions they will accept for the property. In the pay off demand, it indicates Wachovia will not go after the seller for any deficiency but a 1099 will be issued to the property owner. An approved short sale can close in about 28 days!

Approximately 22% of the loans have a second or line of credit loan behind the first. This does complicate things as Wachovia will only allow for a portion of that loan amount to be paid and it will be stipulated in the pay off demand that – usually 10 – 20% of the value of the second loan. Depending on who the lender is on the second or line of credit this may or may not work.

Additionally Wachovia does provide for a payment to the seller at closing so that the seller will have funds to move out of the property and rent a new residence.

A short sale or foreclosure does affect the property owner’s credit score. If the property owner was current on the loan and a short sale negotiated, the credit score will go down 30 – 60 points on average. If the property was late, the credit score goes down 60 – 80 points on average. If the property goes to foreclosure, the credit score goes down 200 – 300 points on average. There may be other factors such as late payments to other entities that further impact the credit score.

Wachovia is truly trying to help the property owner who cannot meet the mortgage obligation through a loan modification or short sale. If you are having trouble paying on your Wachovia/World Savings loan and would like to talk to one of our sales associates about your options, give me a call at 925-287-0550 or email me at kmardiros@legacyrealestateassociates.com and I will put you in touch with an agent who can help you determine what would work best in your situation.

Posted by:Kathy Mardiros

Tagged With: credit score, kathy mardiros, lender, loan modification program, wachovia and world savings

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