How SERVICE TRANSFER affects your Short Sale?
A SERVICE TRANSFER is a process whereby one servicer transfers a loan over to a different servicer. The servicer of your loan might be the bank that you got your loan from or it might be a separate company that the bank hired to manage your account, and basically, they could change servicers multiple times.
Unfortunately, when this happens, it will impact your ability to get a short sale completed in a quick and efficient manner. Primarily because a service transfer requires that much of the short sale process starts over again. You MAY be able to avoid starting over IF your short sale is already approved. The new servicer should honor the short sale, but if you’re in a position where you have a short sale that is getting service transferred (and keep in mind it can happen multiple times), then this is really going to tack on a lot of extra time to your short sale.
The lender is required to give you 15 days by law prior to the transfer. Often times when the loan is service transferred, the new lender doesn’t actually have the loan yet. So you may sit in limbo for an additional 2 – 3 weeks until they receive the information from the prior owner.
Please keep in mind that a servicing transfer might occur at any time during a short sale process. When it happens you just have to be patient and explain it to all involved, and try to stay on top of the new servicer when the file is received.
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For homeowners needing assistance with avoiding foreclosure please go to http://shortsalemitigation.net/
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