Real Estate Agent with Re/Max Professional Associates 74203

The newest road block to successful short sales is a service release.  What is this?  First of all let me explain the "service" aspect.  Large banks like Bank of America, Chase, Citi, etc accept and manage borrower's mortgage payments.  They collect a small percentage of the mortgage payment.  They are now selling off these servicing rights to smaller banks.  Why are they doing this?  It seems for financial gain.

The financial gain is that the new sevicer does not have to honor the cash incentives promised to the homeowners by these large banks.  The thousands of dollars promised to the cash strapped sellers evaporates and leaves them with no money to move.  The buyer experiences more frustration because the short sale process is extended weeks if not months.

I realize these banks are in business to make profits but this is a morally bankrupt financial maneuver.  A few more pennies in the dividend check is not worth the selling out of Americans.  There is a special place in hell for people who are so soulless.


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Theresa Akin

I educate all my buyers on short sales and especially those under BOA.  The whole process and how long it can take. I had one buyer, who even after I informed him of the process put an offer on a short sale and after almost 5 months decided not to wait on a "DEAD HORSE" anymore moved on. Then about 8 months later hedrove passed the house after he had already purchased a different one and called me up chewed my out when we found it had sold for much less than the offer he made. He contacted an attorney to see what kind of actions he could bring against me. I let that attorney speak with one of our attorneys. I still show short sales but fully re-educate on a constant basis buyers about short sales.

Dec 06, 2012 06:13 AM #44
Travis "the SOLD man" Parker; Associate Broker
Team Linda Simmons, Enterprise, AL 36330 - Enterprise, AL
email: / cell: 334-494-7846

arghhhhhh - Short Sales - bad enuff WITHOUT this being added to the mess!! Had one sold on courthouse steps "yesterday" while we were finishing up negotiations on a good ($$) sale for one bank. THEY lost money, I sold another place and came out a few bucks ahead. Still - the STEWPIDDITTY!!!!

Dec 06, 2012 06:23 AM #45
Lyn Sims
RE/MAX Suburban - Schaumburg IL Real Estate - Northwest Suburbs of Chicago - Schaumburg, IL
Schaumburg Homes

I recently read this also & it's just another maneuver to not honor their short sale approval, pay moving expenses. 

I actually think they have a team that sits in a big room & 'plots' ways to throw wrenches into the short sale system just for grins. 

Dec 06, 2012 07:42 AM #46
Sharon Parisi
Keller Williams Dallas Premier Realty - Dallas, TX
Dallas Homes

Conrad,  your sentiments are being echoed in many publications an in this stream of comments.  It leads one to wonder where we are headed.

Dec 06, 2012 08:16 AM #47
Bob Miller
Keller Williams Cornerstone Realty - Ocala, FL
The Ocala Dream Team

Hi Conrad, even worse!  We had a BOA short sale approval and then they said they were selling off the servicing.  Then they did not and we had to start all over in Equator.

Dec 06, 2012 08:23 AM #48
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
your real estate writer

"Soulless" is a good adjective to use when talking about the big banks. It makes me wonder what kind of person would go to work for them, knowing that their actions were going to hurt their fellow Americans.

Dec 06, 2012 08:44 AM #49
Rodney Mason
On Q Financial - Atlanta, GA
FHA 203(k) & HomeStyle Renovation-AL,GA,TN

Mortgage loans having their servicing being transferred from one mortgage company to another is nothing new.  This has been common practice in the mortgage industry for at least 15-20 years.  Most small lenders do not have the capacity to do long term servicing of mortgages.

With small lenders, this servicing transfer usually occurs a few weeks after closing or sometimes, notice is even given at the closing table.  As the mortgage industry has become more highly regulated, some institutions have decided to reduce their mortgage servicing business (i.e. Bank of America, Ally/ResCap) or exit it completely (i.e. MetLife Home Loans). 

When a loan has its servicing transfer, the terms of the loan cannot change.  Only the company, their account number and where they now mail the payment to will change.  All other aspects of the loan have to remain the same. 

Many lenders will also sell non-performing loans to other mortgage companies who have purchased those loans at an often steep discount.  This is likely why you are seeing loans being transfered when a seller has applied for a short sale. 


Dec 06, 2012 08:46 AM #50
Brenda & Ron Cunningham
West USA Realty - Phoenix, AZ
Realtors, Homes for Sale - Phoenix Metro

It is amazing how difficult they make these.  We certainly don't need any more hurdles to get over!

Dec 06, 2012 08:48 AM #51
David Evans
HUD NLB Cumming GA

WOW! Just when you thought these banks hit the moral low point. This is just jaw droppingly w r o n g and why more must be done like this post to expose these predators for what they are and what they are continuing to do. THANK YOU for this post I will share this in my blogs and with my sphere... ;)

Dec 06, 2012 09:00 AM #52
Hella Mitschke Rothwell
(808) 226-1095 or (831) 626-4000
Hawaii & California Real Estate Broker
Thank you for pointing this out to those of us who have not met this problem before in a short sale.
Dec 06, 2012 09:34 AM #53
Conrad Allen
Re/Max Professional Associates - Webster, MA
Webster, Ma, Realtor

Thank you all for your comments.

Dec 06, 2012 10:44 AM #54
Liane Thomas - Corona & Riverside Real Estate
The Jet Team, Allison James Estates & Homes - Corona, CA
Bringing you Home!

We have been successful most times keeping approved short sales from being service released. However, it is not easy and not for the faint of heart.

Dec 06, 2012 11:15 AM #55
Tom Esposito
Alpharetta Home Solutions - Alpharetta, GA

Thanks for the update.  This is a newer wrinkle that I hadn't come across lately.  Just when you think the banks are going to finally work hard to get the short sales thru the system, we come up against another time delaying practice that it seems all the large banks seize on to delay or blockade the completion of the short sale process.  What's next?

Dec 06, 2012 11:25 AM #56
Nan Jester
Exit Real Estate Gallery Jacksonville Beach, FL - Jacksonville Beach, FL
Realtor, Exit Real Estate Gallery

Amen, brother. I read one horror story after another where financial institution are concerned.

Dec 06, 2012 02:41 PM #57
Lorrie Shaver

My BofA clients are vicitims of this exact thing.  We were cleared to close and the servicing was sold 1 week prior to settlement.  I believe that BofA decided not to pay the $5,000 in incentive they promised the owner.  We are now almost 90 days into the process with the new servicer waiting on approval AGAIN!

Dec 06, 2012 06:40 PM #58
Thomas McCombs
Century 21 HomeStar - Akron, OH

The bean counters have discovered another way to keep their bottom lines from being further reduced. That is part of their job.

Those mortgages do not have real people attached to them as far as the beaners are concerned.

Dec 06, 2012 06:59 PM #59
Paddy Deighan JD PhD - Vail, CO
Paddy Deighan J.D. Ph.D

it has gone largely unnoticed that Citibank unloaded most of their serviing properties and Bank of America iunloaded up to 40% of them - all within the last 6 months

Dec 06, 2012 07:47 PM #60
Conrad Allen
Re/Max Professional Associates - Webster, MA
Webster, Ma, Realtor

Thank you for all the comments.

Dec 07, 2012 03:22 AM #61

I completely understand the servicing concept, as described well by Rodney Mason, Prospect Mortgage, in an earlier comment and, in years past, have experienced such.  But, here is a new twist, or so to me.  Have you experienced this example:

Bank of America sold some of its' servicing to OCWEN.  OCWEN has an "offshore" call center where a client calls for assistance.  If you can hear through the multiple voices speaking and answering in the echo-filled call center, as well as understand the dialect, they give an appointment, as much as several weeks out for their specialist to call the client. 

Appointment time comes.  If you miss the telephone appointment, you have to go back through the process.

Totally impersonal; non-relationship building; frustrating to homeowner who just needs some professional help.  It saddens and disappoints me to see United States banking institutions growing their means on the backs of legitimate, assistance-seeking homeowners...good folks who have sad things to happen in their lives.

Dec 07, 2012 05:58 AM #62
Rob Renk
Center Street Lending - McKinney, TX
AE | Fast Fix/Flip Loans for Residential Investors

I agree.  The big banks make the process worse because they want to squeeze every nickel from a deal.


Dec 07, 2012 08:16 AM #63
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Conrad Allen

Webster, Ma, Realtor
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