Is BofA Servicing Your FNMA Short Sale? If So, You Need To Read This....

Is BofA Servicing Your FNMA Short Sale? If So, You Need To Read This....

Day after day, we read about the horrors that BofA puts our clients through when conducting a short sale.  Much of what we read are "rants" from disgruntled agents. Today's blog is somewhat of a "rant", but also contains what I feel is some valuable information to arm yourself with the next time you take on a short sale that involves BofA servicing a FNMA owned loan.

A recently referred client called and explained his situation.  After going over all of his options, he decided to have me list his home as a short sale.  We listed it, and received an offer approximately 30 days later.  We sent our 70+ page short sale package to BofA on January 4, 2010.  We tried to run the deal through Equator, but were told to fax it in instead by two different BofA representatives. As always, I called weekly on the file, only to be told time and time again that BofA was waiting for FNMA approval on the short sale.  

Finally, after calling weekly, on March 5, 2010, BofA told me that FNMA had approved the short sale at the purchase price of $79,000.  As part of the agreement, they would be paying $8,000 to the 2nd lien holder, Chase Bank.  They told me to call back two weeks later to see if a BofA negotiator had been assigned.  I asked the BofA agent, "Why do we need a BofA negotiator when FNMA has already approved the short sale?"  She told me it was "company policy".  I then reminded her that we had a foreclosure auction date set for March 17th (less than two weeks later).  She told me to call back 5 business days before the auction date, and they would postpone the foreclosure date.  No problem, I thought.  Silly me.  

So, 5 business days before the short sale, I called, waited on hold for 30 minutes, and put in our request to have the short sale postponed.  They told me they were still waiting for a negotiator to be assigned.  Again, no problem, so I thought.

On March 15th, two days before the auction, I called just to make sure everything was in place for the postponement of the auction.  This time, the BofA agent tells me, "I notice in the notes that you did in fact call and request the postponement on March 10th (5 business days before the auction), but the person you spoke to failed to initiate the request."  In other words, the idiot put my request in the file notes, but did nothing with it.  I asked her to initiate it, and she told me it was too late.  The foreclosure auction could not be postponed just two days before the sale.  Despite my begging/pleading, then demanding, there was nothing that could be done.  As you can imagine, I was fuming.

My clients called BofA, and they told them that they had never even received a short sale request, and this was the first time they've heard of it.  "Sorry", they told her, "We can't stall the foreclosure".  HUH?

My client called me, flaming mad, asking why I hadn't sent BofA the short sale package.  I politely asked him to call back and talk to a different BofA representative.  He did, and was told, "We have your short sale package, but the private investor that owns your loan does not allow short sales".  HUH?  This loan was owned by FNMA, not a private investor, as evidenced on the FNMA website.  

Next, my clients called FNMA, only to be told that BofA was the only one who could postpone the foreclosure date.  To make a long story short, my clients lost their FNMA approved short sale to foreclosure on March 17th, 2010.  They were devastated.

I decided to contact the local NBC Affiliate, Channel 12.  Two hours later, Melissa Blasius was at my home, interviewing me for the story.  Later that afternoon, she drove to my client's home to interview them.  The interview aired Monday, March 29th.  To see the interview, click here.

I spoke to Ms. Blasius yesterday.  Since airing the story, she's had five other homeowners contact her that had the exact same thing happen to them.  In all five cases, they lost their homes to foreclosure with BofA servicing a FNMA approved short sale.

Yesterday I also received a call from a representative in the BofA Short Sale Department.  He told me that the Foreclosure Dept. and Short Sale Dept. had a "breakdown in communication".  He told me that if the same buyer would still be willing to buy the home at the same price, he would rescind the foreclosure and approve the short sale.  Lucky for us, the Buyer had not found another home, and agreed to go through with the short sale.  The problem...  Someone decided to steal the a/c unit during our two-month wait.  The Buyer agreed to pay $4,000 less than his original offer (in order to replace the a/c unit).  Obviously, if BofA were to sell it as an REO, they would either have to replace the unit, or take less for the home.

Now, enter the newly-hired REO Agent.  She called me three days after the auction, asking me to take down my sign and remove the lockbox.  When I called her yesterday, she told me she had already changed the locks, and was awaiting approval from the asset manager on the asking price.  I told her to hold off on putting it on the market, as it appeared the foreclosure would be rescinded.  Needless to say, she wasn't too happy.  Until she heard "officially" from BofA, she was proceeding with putting it on the market as an REO.

What occurred next is probably the most important detail to take from this blog.  FNMA is claiming that they never even received a short sale package from BofA on our deal.  In other words, we sent in our information on January 4, 2010, and BofA has sat on it since then, never sending it to FNMA.  By telling us that they were waiting for FNMA approval for 2 months, they were able to stall the deal until the foreclosure date.

Two lessons learned here.....

1.  The next time you get a FNMA owned loan, and BofA is servicing it, call FNMA early in the process to see if they have actually received the short sale package.

2.  If this happens to you, don't be afraid to contact your local news station(s).  BofA's egregious behavior not only could have potentially killed my client's credit, but they would have been on the hook for an additional $8,000 for the 2nd mortgage that was supposedly "approved" by FNMA.

We are still waiting for BofA's response to the Buyer's request to buy the home for $4,000 less than the original purchase price (to cover the cost of the missing a/c unit).  My clients are prepared to file formal complaints with anyone that will listen, including the AZ Attorney General's office.

Don't let this happen to you.  In my mind, BofA is nothing but a bunch of crooks, and they have stooped to a new low.  If we don't stand up and fight for what's right, they will continue to get away with it.

Bob Hertzog

www.foreclosureuturn.com