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My house was foreclosed and I did not know…

In the last week I have received many responses to the last blog that I wrote (Do They Really Know What They Are Doing?). The majority of the people (who happened to be homeowners) have told me that after working a short sale with Bank of America for months, and having strong offers, the bank foreclosed and never gave a response to any of the offers.

One of these was a homebuilder who had more than $200,000 equity in his house, and even so the bank foreclosed. Well, BOA clearly shows the it has no feelings involved with these processes. I truly believe, however, that it is my responsibility as an agent to follow up with this bank and make sure that my listings are not foreclosed in the middle of the process. I can say that I have saved each of my listings from foreclosure between two and four times each during the short sale process. It is a long and frustrating process, one in which I spend over three hours doing it each time, but I truly believe my clients deserve this time and effort.

I show the bank that it is a good business decision not to foreclose, and when they see that I do not give up calling and calling until the extension is given (I think I become a pain in their...), then they do it.

Your clients really deserve an agent who is working in their best interest. Are you really up for all this hassle? If the answer is no, please refer these clients to an agent who is willing to make this commitment and has the experience to make it happen. It is better for everyone involved, and could mean the difference between bankruptcy and saving the client's financial future.

Posted by Adriana West on 10/23/2009 08:17 AM

Comments (16)

Short Sales in the Mortgage / Finance Channel

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16 Comments on My house was foreclosed and I did not know…

OCT

I refer these clients to an agent in our agency that handles these types of property's. I dont have the motivation of it.

I have done over 12 short sales with B of A and have 5 more in process they are the worst.

Adriana: Many homes with equity foreclose. It's not about equity ... it's about missing payments. You are doing a GREAT job ... and the best you can with what you have control over. We cannot save them all. You are right ... your clients (everyone) deserve an agent who is working for their best interest. I commend you for what you are doing to help people. It is a lot of work with little financial reward.

Thanks for what you do Adriana. I will say, dealing with short sales and the process of short sales works my every last nerve. It is not conducive to my type A personality. I am a CDPE, Certified Distressed Property Expert, and will work my knuckles to the bone to save my clients from foreclosure, but I would looooovvve for the banks to make our efforts less futile in so many cases.

Short sales are not for everyone Adriana and shouldn't be taken if the effort that it requires isn't there!

Thanks for great post....

Diane

Banks seem to be overwhelmed and, in some cases, "winging it" these days. You are right that, once we agree to become involved in a Short that we owe it to our clients to be on top of the process.

Adriana - BofA gets more bad reviews than any other bank. I regularly hear horror stories such as yours. It's not just that they seem to be incompetent, they make not effort to help their customers.

I just spoke with a broker yesterday that had a few properties in the short sale process go through foreclosure without any response on the offers.

Hello Adriana

I have been doing short sales for over 5 years now, and I agre that it takes a certain type of person to the do the job right. You must be diligent and highly motivated to continue calling and callling and waiting and waiting to get the answers you need. That being said, I have never had a house I was attempting a short sale on foreclose without my knowledge. One of the things I do that many agents don't is that I subscribe to the foreclosure listings in my area. I am constantly checking to make sure that my short sales don't sneak up on the list. I also always ask the bank each time I make contact if the file is still in the Loss Mitigation Dept +/or whether or not a foreclosure date has been set. Here in Texas, the homeowner must be given at least a 21 day notice that their house is going to be auctioned off. Sometimes when the homeowner is still occupying the house (and not scared to open mail), the homeowner has been the one to alert me to an impending auction date. Working short sales is very challenging and requires constant motivation to see it through to closing.

Thanks for the post, Adriana. It's good to have fellow short sale specialists out there to compare war stories with. Currently, I am catching up on Active Rain posts while I wait on hold with the various lenders I'm working with. I agree whole heartily that if you don't know how to a short sale or you are not going to do the job right you owe it to your client to refer them to someone who does!

I have worked short sales for the past 3 years in San Diego....I have never had a short sale go to foreclosure without knowing about it. Actually, I have had all my short sales approved and closed with the exception of one.

We get NOD postings in CA and the homeowner gets a mailed and posted copy of the Default Notice. And while I have had slow/bad negotiators, I have never had a bank not respond to a short sale package....if it is received in time. But watching homes go to foreclosure is a painful experience for everyone!

OCT

Laura:

Great! Glad to hear when someone puts the client's best interest ahead of short term money. Especially when it isn't "Short Term" anyway. I imagine you are getting a referral fee for that, which makes it a win for everyone involved.

Hi - not sure whether you are Mark or Tim (Elite)...

BoA is certainly the worst and doing their best to dig the hole deeper as they "improve" their processes. Half my board is Bank of America, and I spend hours each week on the phone wading through the molasses of their process with untrained reps. Buyers Agents groan when I tell them BoA is the lender on one of my properties, as I do when I hear it from them when I represent a buyer.

I wonder if we, as Short Sale agents with track records of success, could band together to make some sort of a lobbying group and force some change on the molasses-bound (with winter approaching) management of their Loss Mitigation group. Wouldn't that be nice...

Adriana

Kathleen:

You're absolutely right. It's been my experience that the higher the equity, the faster the lender forecloses because there is a better chance that they can recoup their money. I understand it. It's all about money, when if there were a bit of human thinking involved in the process one would see that a borrower who has significant equity is seriously motivated to do whatever it takes to keep from losing that equity, and would work side by side with the bank to make any reasonable suggestion work.

And you are also right about the "little financial reward" because on top of all the extra paperwork involved in the sale, and training their reps to do their jobs properly, they turn around and want to cut my commission. That's when I get a little angry.... :D

Diane:

Yes, wouldn't it be nice if the banks made our efforts less futile... Or even refrained from shooting themselves in their own feet. Just that much help would be wonderful.

Adriana

Gloria

Yes, if you look at my last blog, you can see just how overwhelmed they are. They are hiring like crazy, and there is no way their training program can keep up with the influx along with the change in the market. I don't envy them their job at all. I just wish they would do it better.

John:

That is absolutely true. As I said in an earlier response, the amount of groaning you hear when a buyer's agent is told that the lender is Bank of America is phenomenal. They have made it clear to me that their only goal is to survive the process with as little damage and effort as they can manage. Customer service, or simple politeness to the person on the other end of the phone, does not even enter their minds. Once again I wonder, would it be fruitful for a group of strong and experienced short sale experts to attempt to convince them to change their processes and way of thinking.

Adriana

OCT

Darrell (Integrity):

You're in that business... Can you think of any reason why a lender would do that? Foreclose without even considering discussing options with people who are clearly offering to help them cut their losses? So maybe the current offers aren't any good. But we all know why a bank considers a short sale, what they have to gain from it. Why would they not at least make an attempt to see if one of those bad offers could be made into an acceptable offer, cutting their losses? Why would they intentionally shoot themselves in the foot?

Kathy:

Like you, obviously I have never had a short sale foreclose on me without my knowledge. The title quote is actually from a response to one of my earlier blogs. You are absolutely right that we as agents must constantly be on guard to keep disaster from sneaking up on us. Thank you for pointing out several alternative ways that can be done.

Adriana

Angie

Absolutely. I know we're all hungry in this market, the better to get a small referral fee from an expert who really helps a client, than lose the full commission when our client loses their house and their credit.

Dawn:

Like you, what I describe has never happened to me. I make sure of it. I've lost more than one this year, because I do so many, but the total I've lost over the past four years is still in single digits. If you go back and read all my blogs, you could pretty much figure out how many, as each loss is memorialized in some way in an article.

What I find really painful is when a lender forecloses with a decent offer on the table, all for the lack of a couple thousand dollars, out of sheer stubbornness. The client's credit is heavily damaged, sometimes forcing them into bankruptcy. Then the property comes back on the market 3 months later (I keep an eye out for the ones I lose), and it sells 6 months after that, for 10-15,000 less than my old offer - the one they rejected. Those are the ones that really hurt me because the pain involved for everyone was SO avoidable.

Adriana

NOV

For us REALTORs, the code of ethics is very clear on handling these situations. If you are not representing your client, allow someone else to do so. Trying to help is not the same as helping. There are lots of agents through out the nation that will gladly accept referrals for short sales. Call them.

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