BofA Now Sharing Borrower Financial Information With Re/Max & Keller Williams Agents...Are They Nuts?
Yes, you heard that correctly. BofA and DTS (Dignified Transition Solutions) have begun sending out the names/contact information of borrowers that are in danger of losing their homes to foreclosure (30/60/90 days late) to Re/Max and Keller Williams "short sale experts". These agents are asked to follow up with these "leads" to go over the short sale process with them. The program is called the "Short Sale Alternative Right Party Contact Program", and is coming to a city near you (if it hasn't already). I wrote a blog post titled, "Short Sale Consumer Alert-BofA & Re/Max Are Now Short Sale "Partners" almost two months ago. In the post, I talked about the potential problems for a borrower that is being represented by an agent that is being fed leads from their lender. Rather than go into the details, you can read the post for yourself and come up with your own conclusions.
Please let me make one thing clear. I have Zero hard feelings towards Re/Max & Keller Williams agents. Kudos to these companies for convincing BofA that this is a good program for them, and shame on BofA for not thinking this through (as if they haven't had enough bad press lately).
For today's post, I wanted to focus on the legal ramifications facing BofA for sharing the current financial condition/health of their borrowers with, of all people, REAL ESTATE AGENTS! Are they on drugs? I'm not an attorney (nor do I play one in real-life or on tv), but doesn't everyone think it's just a little "odd" to share this information with real estate agents without the borrower giving them permission to do it? Could BofA be this stupid, or am I completely missing something here?
Add the fact that, according to their website, DTS's leadership consists of 4 individuals, and all 4 of them are former BofA loss mitigation executives. As an FYI, from what I can tell, DTS is the "middle-man" who actually processes the short sale on behalf of BofA. The goal is to "streamline the process" (i.e. do what's best for BofA). Gee, I wonder if the borrower has a fighting chance in this game? Hmmm, let's see...The borrower is "represented" by an agent who was referred by their lender (BofA). According to the Short Sale Party Right Contact Program, and I quote, "An agent's past performance may affect future allocations". Yep, I'm sure that ALL agents will be looking out for their clients. Who needs those stupid referrals anyway? Right? NOT!
Come on BofA, are you serious? Do you really think that sharing this personal financial information with total strangers is a good idea? Did your legal team actually review this program before you launched it?
More importantly, I ask an important question of the borrower...Are you ok with having an agent represent you in a short sale that has been deemed a "short sale expert" by the same lender that is planning on taking your home back through foreclosure, and is counting on future leads (like you) to increase their business? Do you really think that all agents will be willing to bite the hand that feeds them in order to look out for your best interests?
My hope is that BofA borrowers that are in danger of losing their home to foreclosure ask themselves these very important questions before moving forward with an agent who was referred by the very people that are threatening to foreclose on them. And, more importantly, I hope that when they do get a call from one of these "short sale experts", they quickly pick up the phone and call BofA to find out what gives them the right to share their financial situation with total strangers.
Am I missing something? If so, please share with the rest of the class!
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Bob Hertzog
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Copyright © By Bob Hertzog 2011 *BofA Now Sharing Borrower Financial Information With Re/Max & Keller Williams Agents...Are They Nuts?*
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17 Comments on BofA Now Sharing Borrower Financial Information With Re/Max & Keller Williams Agents...Are They Nuts?
Kinda smacks of not being legal, who is the agent representing anyway and is BOA getting a kickback??? We sure live in amazing times. I have heard stories of pressures being put on home sellers to list with the agent that is "recommended" by BOA and not the agent they knew or were comfortable with. The banks are running our business into the ground. Good Post.
Cindy, I've heard rumors of it, but am now starting to actually see and hear about it more often. For the life of me, I can't see where BofA thinks this is a good practice.
Mary, my point exactly...Could this be contrued as dual-agency? Afterall, the agent is getting leads from the same entity that is foreclosing on "their" client. The banks are trying to run our business into the ground. It's up to us as agents to point out these programs to our clients.
I heard something along these lines a while ago, but didn't know it was actually happening. Great post.
Bob, i knew this was coming but where is the legal challenge on this I wonder?? We have not had this come to us that I know of yet but it is in the works...I will re-blog this one...as Phoenix short sale agents, consumers need to know they have the best and right choice with you & your team and not an agent who does not have a qualified skill set to do the best for the homeowner as you would.
Debora, it's definitely happening. Hopefully enough borrowers will complain, and BofA will realize this wasn't such a good idea.
Thanks Ginny, and thanks for taking the time to re-post it. I hope that all agents share this information with their sphere.
I think that deleting your comments was a very smart thing to do, and I'm sorry if you found this post to be "insulting and accusatory".
That being said, I want to make it perfectly clear (as I did in my post) that I do not harbor any ill feelings towards Re/Max or KW agents (or any other agent for that matter) that is participating in this program. I would also challenge you to back up your statement about me "implying unethical and illegal behavior on the part of Re/Max agents". Please show me where I've done this in my post.
The purpose of this post is point out what I feel was a terrible decision on the part of BofA to share the contact information of their borrowers with total strangers. Simple as that.
Happy Thanksgiving to you and yours Miriam! Thanks for checking in!
Bob haven't heard about this in our area. I was previously with KW in Franklin. Not many agents were experienced short sale agents in the office. This seems like a huge liability. Fortunately, Phoenix distressed homeowners have an expert in you as their Phoenix short sales agent. You provide an excellent service to these troubled sellers.
Lenders have been doing this with Titanium Solutions for awhile. I would love to see a legal challenge to it. But more than likely there won't be. There will just be the lawsuits from homeowners who signed up for the program and later feel that they have been had. If I wanted to sell real estate for BofA, I would do REO work -- I don't know why short sale agents would want to receive their leads this way. It is disappointing to see yet another aspect of our business be intruded upon by the banks.
Hi, I am a remax agent in the chicagoland area that is working with DTS (dignified transition solutions) to help homeowners avoid foreclosure. FYI, the homeowner is not obliged to use me or any specific agent, they actually are provided a form to sign explaining their agent choice is totally up to them.
it is not an easy program, I get many contact names and few homeowners interesed in the program. but I stick with it because I do believe a short sale is better for the homeowner than a foreclosure. also, this program offers the homeowner relocation expenses and releases them from deficiency liability. neither of these benefits offered with a foreclosure! In this program the homeowner is not required to submit financials, hardship letter, or taxes - they are preselected for the program. I dont see any of their financials (like in a normal short sale), I only know they qualify for a cooperative short sale.
Once the homeowner signs up for the program, BofA orders an appraisal, then I am given a preapproved list price. This makes marketing easier, since the price is set based on the appraised value.
I have only been involved a few months, but so far the homeowners that sign up for the program seem very happy with this option to avoid foreclosure.
specifically to the point of BofA giving contact info of clients to realtors, not sure why this is such an issue - the information is readily available on public web sites.... could you explain in further detail how the homeowners are not benefiting from this program, how they are being "had"
Thanks for stopping by Synthia. Like you, I feel that in most cases, a short sale is a better solution (vs. foreclosure). I'm not sure how things are done in Chicago, but in AZ, a homeowner's information doesn't become "public" until a Notice of Trustee Sale is filed, which usually happens after 3 missed payments (90 days late). It is my understanding that BofA is reaching out to agents at 30 and/or 60 days late, before the information is made "public". You may think this is ok, but I think that most borrowers don't appreciate having their current situation being shared with total strangers (agents) without their permission.
Add to that the fact that the program specifically states that future referrals are dependent on the agent's past performance under the program. I look at this and ask myself how many agents will truly be looking out for the best interests of their clients? In my opinion (and years of experience in this business), this creates a major conflict of interest. Will the agent work for their client, or will they side with the bank, in order to keep the leads coming in?
As to your point about a "pre-approved list price", I'd prefer to allow the market determine what the home sells for. What happens when you get a bad appraisal and the home is priced too high? I'll tell you what happens...The house sits on the market forever, and your client is now that much closer to a foreclosure. Not a good situation.
If I'm a borrower, I'd be ticked to find out that the bank is sending my name out to total strangers, and the LAST agent I would hire is one that is referred by the same lender that, in most cases, has proven to be difficult (if not impossible) to work with up to that point.
Homeowners need to remember that banks don't come out with programs like this to help them. They come out with programs that adds $$ to their bottom line, and could care less about the homeowner.
Agents that receive these leads look past these very important issues, but who could blame them?
Bob, I just came here from Mary Macy's reblog.
We all know that some homeowners wait too long to contact an agent to get a short sale onto the market and sold. But to flag that as a lead to an agent who's primary interest is in selling the home...not in working out any kind of a modification or forbearance? No agent should be counseling a homeowner on whether to sell. At least in IL, that is a financial planner or attorney's job.
I have to think a little about this.
Hi again, thanks for responding to my post. to clarify a few points (from my experience in the DTS program).
After many years, BofA has figured out that expediting the short sale process saves them money.
I am a Keller Williams Agent and I have been listing and selling short sales since 2006. I have closed more than 115 all by myself. No team. No processors. No kidding. Recently, I received a call from DTS and, after talking to the "representative," immediately suspected that it was Titanium Solutions with a new name. I had been selected because I had successfully completed transaction through the Equator system. huh? Okay, I'll bite. I asked if they were looking for referral fees. I was told that they are paid by Bank of America. No cost to me whatsoever. Okay, I'll take another bite because now I'm really curious and I'm thinking that hades has actually frozen over. I decided that I would sign up, take the webinar and get the scoop. Sure enough, it was Titanium Solutions dejavu all over again. Don't tell anyone but I sign up for these things so I can find out what they're up to. I find it helps to see things from the "other" side. I have absolutely no intention of ever accepting any business from this 3rd-party vendor because, you are exactly right, Mr. Hertzog, Realtors/Agents need to remember who they work for, who their clients are, what their fiduciary duties and ethical obligations need to continue to be. Back in the days of Countrywide, a young lady negotiator once told me that I needed to advise my clients to sign an unsecured, interest free promissory note if I wanted to get paid and then informed me that, after all, I was working for Countrywide. After taking a deep breath in, I did not disagree with her but, instead, decided to agree with her and thank her for her assistance. My clients did not sign an unsecured, interest-free promissory note, the short sale was approved, their deficiency waived and we all went our happy and separate ways. I spent 30 years working as a legal assistant for some of the finest legal minds in Dallas, TX. Why argue with stupid? You can't fix it. Keep your friends close and your enemies closer but never, ever let your enemies know who they are (in the short sale business). I think this will last about as long as it takes the first borrower to sue because it doesn't turn out the way it was represented to them by the person who allegedly isn't working for the lender. yeah, sure. One more cliche and I will stop. If it walks like a duck and it talks like a duck then it's a duck. This, my friends, is definitely a duck.
Oh, one more thing, Bob. I am not at all offended by your comments and I don't believe that you are throwing any Keller Williams or ReMax Agents under the bus. I am glad that I don't know who, in the KW Family, thought this was a good idea and I am going to choose to believe that they had good intentions but, clearly, do not understand the process well enough to realize that short sales are about as similar to REO's as an elephant is to a flea and then drank a whole bunch of Koolaid; but, isn't that usually how this happens? Kind of like the Treasury Department designing a short sale program promoted under the premise that pre-appraising a property before someone offers to buy it is a great idea AND you will receive THREE THOUSAND WHOLE DOLLARS should you choose to participate in this wonderful program which our government spent $6M to create? What about throwing in a toaster, too? Compared to the billions and billions and billions of dollars we're in this, so far, they might as well have spent monopoly money. 'nuff said.
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