Real Estate Blog - Warning: Countrywide and PMI Short Sales

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Warning: Countrywide and PMI Short Sales

Watch out if you are working a Countrywide short sale with PMI! There is some funny stuff going on... I've been working a Countrywide short since October 2007, with a Countrywide second on it. There have been the usual delays, appraisals, counteroffers, request for seller's medical receipts, then a denial in early December. About a week later, the buyer re-wrote his offer to the terms Countrywide wanted. Yesterday, after more delays with "re-opening the file", ordering new appraisals, etc. I was informed by the negotiator that the second mortgage had been "released" to the AIG United Guaranty, the PMI company. She said Countrywide would not give an approval until they knew what the PMI company wanted, as their policy has changed and they no longer negotiate with PMI companies. She said that was now my job, and gave me the contact information, with a warning that PMI would be very difficult to get good terms from. I asked her when the loan was sold. She "fumbled" through papers and said she could not tell.

I called AIG and they were right on top of it. They said the loan was bought on NOVEMBER 5- a few weeks after the short sale offer was submitted! The AIG rep did not seem pleased there had been a short sale in the works. He said they should have been told when they bought the loan, and that "Countrywide dropped the ball".

I have two big problems with this. One, is that Countrywide did not disclose pertinent and known information to me. I worked over two months on their good word for approval, when they tell me it will all be moot depending on what AIG says. Why didn't they tell me this on November 5? Second, they did not disclose to the PMI company about the status of the loan. I have spoken to a local attorney who said there seem to be RESPA violations going on. He said there is a Florida doctrine "Holder in due course" which requires notification to a loan purchaser about anything affecting the loan prior to sale. He said when that is the case, the second mortgage purchaser has legal defenses which allow them to hold the loan free and clear of all defenses a borrower may have against the original note holder. He and my seller will go forward pursuing this if I run into a stone wall with these new negotiations. I asked the Countrywide loss mitigation department if I could switch negotiators, as it is quite apparent I have been misled. They said no.

BLOG UPDATE: There are now multiple incidents where Countywide has sold a second, or "serviced released" a note, even months earlier, and not disclosing this information upfront during the short sale negotiation process. I will write about this in another post.

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Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.

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Wendy Rulnick specializes in real estate sales, short sales, traditional sales on Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Crestview, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Wendy Rulnick, Broker and Realtor, has been selling real estate for 20 years. She has won numerous awards, including the coveted ADDY for advertising design. An expert marketer of real estate listings, she negotiates successfully to her clients' advantage. She is supported by a team of top buyer specialists. She lists and sells homes, condos and townhomes.

This site, Wendy Rulnick or Rulnick Realty, Inc. is not providing legal or tax advice. The information provided is for educational and informational purposes only. It is recommended that sellers considering a short sale should consult an independent legal and tax advisor for more information

Posted by Wendy Rulnick "Its Wendy!" Destin Short Sales on 01/24/2008 09:37 AM

Comments (21)

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Originally posted at: Destin Short Sales- Emerald Coast Florida Real Estate: Warning: Countrywide and PMI Short Sales

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21 Comments on Warning: Countrywide and PMI Short Sales

JAN

2008

Short sales can be very tricky if the bank negotiator is not getting the job done. Let me know the out come.

Do a Google search CW is "dropping the ball" left and right these days

FEB

2008

Wendy- I have found Countrywide one of the most difficult to negotiate with. What you went through is outrageous.

Thomas, Dave and Mark: Thank you for writing. Almost two weeks later, I don't have a response from the PMI company. I sent them a chronology of events and I hope they are investigating and taking that into consideration in approving my seller. Wendy

FEB

2008

I had the same problem with GMAC, I found out months down the road that it was sold and I wasnt informed! Oh the joys of short sales.

Karisa, The situation has gotten worse. I was told by the PMI company yesterday that they had given approval to Countrywide on my sale November 23. Why, then on January 23, did Countrywide ask me to call the PMI company to negotiate the approval- when they already had it? Wendy

MAR

2008

This is very interesting, I had a similar situation where the PMI company had to give approval. Fortunately, they got back in about a week with an approval. It is hard to fidure out who is making the decisions now-a-days.

Matthew, Yes, it seems to be a good question to ask at the beginning- "Is there PMI involved?"

MAR

2008

Wendy- Country wide is one of the worst ones to work with. And you get different stories all the time. There is no rhyme or reason to their madness. Katerina

Katerina, I agree. Different negotiators, different stories! It is crazy. Thank you for commenting. Wendy

JUN

2008

Oh darn, I've got one with Countrywide and PMI... I'm really tempted to just give the listing back.

Cathleen- Ask Countrywide right up front if they will be contacting the PMI company. Don't waste time. They told me it was a "new" policy that they no longer dealt directly with PMI companies. That may not be true. Good luck.

JUN

2008

Wendy- just another fly in the recent ointment. Thanks for sharing.

Mark- I'd go "Eyes Wide Open" depending on Countrywide negotiator, Thank you!

JUL

2008

I was just contacted by a PMI company stating that they could help us get our short sale offer approved and that I needed to send over the entire bank package to them. I thought this sounded a little funny- why do they need all of that if the bank (countrwide) already has it? I told her that I'll need to have written permission from the borrower to do so, even though she assured me that she had just gotten off the phone w/ the borrower.

Any thoughts?

Wow, I hope I don't come across that one a similiar file with them, but I am guessing it possibly will. Thanks for the heads up.

JUL

2008

Jennifer, I believe your authorization to speak with the primary lender may be satisfactory, since the PMI company is behind that loan. I think sending the whole package may be part of that particular company's process. I am sorry you are dealing with the run-around.

Heather, I've just resubmitted an offer on this same listing. I am very curious to see how it's handled "this" time. Thank you for commenting.

Countrywide was bought by Bank of America

MAR

I have sold my house 5 times ,different contracts with CW SHORT SALE DEPT. They took 6 mo's and at the last minute asked for 45000 .This became a problem and the sale ended with a voice machine asking either I pay or file is closed end of message.Then tried deed in lieu ,they said better if I short sale and now have sold it full cash offer .Demand 30 day response ,no contact buyer walks .Sold it again there still is no contact .9 mo's no one can reach a person in charge of these short sales ,everytime! Unless they need something to begin the process there is nothing to be heard after.I am working with very expierenced brokers,they have never seen anything like what I have dealt with.P.S. THE FIRST SALE IS MORE THAN 60000 MORE THAN CURRENT SALE.GOOD LUCK WITH COUNTRYWIDE !Wish me luck ,I have done everything a person can do.They deed in lieu dept. asked if I would be willing to barter with pmi?

APR

This is a follow up to my last statement .I have now sold it 7 times.The last full cash offer ,the buyer walked when countrywide would not contact the broker within 30 days ,as the contract read.I have sold it again full cash off ,but now before this sale I have a new contact person.It seems from what I am hearing the banks do not want to sell bank owned properties waiting for bailout money.This comes from Coldwell Banker and the scenerios they are encountering.They have appraised this home for so little no one would want to sell it,no wonder I have no problem getting full cash offers.If this is the case with countrywide and the other banks what are their motives.I am into this going on 10 mo's.They get the keys very shortly ,if this is not resolved.It is their appraisal ,their terms and fully approved by them.As I stated they now are 65000 lower than the first offer and could have closed in 30 days.Wish you all a lot of luck!

BC - I do wish you luck! Since you have an experienced agent, let her be your guide and try to take the stress off in your short sale. It sounds exhausting - but hang in there.

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