Consumer complaint received 2022-10-12
Product: Mortgage — Conventional home mortgage
Issue: Struggling to pay mortgage — 
Company: Fay Servicing, LLC (NJ)

I sent the following appeal to Fay servicing and told them to send it to the investor, they made the decision on their own and never sent anything to the investor. They are harming severing people including the economy by forcing a house into a foreclosure in a declining market. 

This is what was sent to Fay servicing : We are in receipt of the denial to the short sale and this is our official appeal of that decision. We are not disputing the value of {$400000.00}. On XX/XX/XXXX an interior inspection and BPO was conducted on the property which showed comparable sales as to the current market today. As everyone knows the market has dropped 11 % since XXXX and each month it continues to drop. The economy has entered into a recession and home values are expected to continue to drop over the next 12-24 months.

Fay Servicing did advise us that the investor is looking for {$500000.00} on the house when their own BPO shows the value at {$400000.00} and the short sale offer in place is {$370000.00} which is 94 % of the current market value. This house is a 2 bedroom house. It will need a great deal of work to bring it to a value of {$500000.00}. First off a bedroom would have to be added. The kitchen and bathroom will need to be fully renovated. The outside of the home will need new siding and updating along with the foundation issues that need to be dealt with. The few potential buyers that showed interest in the house realized that the kitchen ( 30 years old ) and bathrooms are very old, in addition to light fixtures, doors, electrical, plumbing, winows, etc. There are many unseen updates that will need to be attended too. Any buyer will not be able to obtain a Certificate of Occupancy. Total estimate of repairs is between $ XXXX {$100000.00}. The current offer is also the highest offer we have gotten and the house has been listed for several months. 
If the property was to be held after a foreclosure for 1 year the carry costs to the investor would be XXXX based off the incorrect value the investor has of {$500000.00}. In addition to this loss the repairs needed are over {$75000.00}. This fact brings the investors value down to {$320000.00}. The BPO clearly states that the fair market value is {$400000.00}. The investor value of {$500000.00} would be market value for this house if it was in normal condition with no repairs needed and it was not a short sale. After the investor was to foreclose on the property they would have to evict the owner which will take several months and then resale the house which could take a year or more in a slowing market with increased interest rates. The investor will end up with an offer lower then what we have or at the very least equal to it. After taking into consideration fees, costs and expenses over the next 12-18 months the investor will take even more of a loss then they have and we can 100 % guarantee that the net income would be less in 1-2 years from now after a foreclosure then it would be if the short sale was to close next month with the current buyer.

We have a strong buyer who can close within 45 days of short sale approval. Please over turn this decision and approve the short sale. Submit this to the investor as well.