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Indy Mac Accepts Less at Auction ..... Rather Than A Higher Short Sale Offer

I recently tried to negotiate a short sale with Indy Mac Bank. We had a very competitive offer with comps to support the offer and they would not accept it.

We had an offer for $300,000 the most recent sold in the area was $290,000 with $10,000 seller help. The bank countered at $335,000. The client did not want to pay more for the property.

We had a foreclosure date looming but they would not cancel the sale. My rep told me to get him an offer for $335,000 that is all they will look at.

So of course we did not get an offer for $335,000 and the property went to foreclosure auction. At Public Auction the property SOLD for $254,500.

I have done a quite a few short sales but none as non-negotiable as this one with Indy Mac. Even if you add Realtor fees at 5% and 3% seller assistance the offer for $300,000 was still better than what they accepted at Auction.

Has anyone else had a similar experience?

Posted by Endea Thibodeaux, CDPE, CLHMS, RECS Real Estate Auctions - DC, MD, & PA on 02/06/2008 03:02 PM

Comments (34)

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34 Comments on Indy Mac Accepts Less at Auction ..... Rather Than A Higher Short Sale Offer

FEB

2008

I often think the banks are doing everything possible to make the situation worse.

Yeah Michael I think I agree!

I had the same problem with Option One. We had an offer for $325,000 on the table and they countered at $335,000 - same as yours! When the buyer said take a hike, Option One would not give us more time to get a better offer. They foreclosed on my client's home with a starting bid of $300000 at the auction. No one bid. They are now holding this property on the books and have it listed for $315,000. I am pulling my hair out to figure out their logic (or lack of) with this scenario.

Wow Jason, your offer was so close! Give me a break. It doesn't make any sense.

I think maybe they put a number on the file that they will accept and the Reps do not have any decision making authority to negotiate. They tell you they are taking the file to mangement but they aren't.

In this case, I was negotiating entirely by voicemail. They never pick up the phone and if you call to get an answer from customer service (a joke of a title, there is no customer service at Option One) they will tell you to leave a message!!!

IT makes you wonder if there is some other factor that is precluding the ability to work with note holders. How much will it cost them before they realize that these "assets" are really liabilities for the notes.

Bonner

Jason - I have heard about Option One. I have never had a short sale with them. They seem like they are very in-reasonable.

Bonner - I need to find out what that factor is. Thanks for your post.

This happens to me every single day of every single year! It drives me crazy. The problem is the bank reps and their supervisors think they know the market sitting behind their desk better than we do. once the property is foreclosed on the REO agent tells them the real deal and they have to listen or sit on it for ever...SAD

Klarque- That is sad. Thanks for posting.

Wow, that is sad to hear. I am working 3 with Indymac right now. It probably won't be good for my clients either. I guess I better get them prepared for foreclosure.

Stella - I don't know where you are in the process but after the Appraisal and BPO they came back with a ridiculous counter. Hopefully this will not happen to you.

FEB

2008

I went to make comments on your last 2 blogs, and comments have been disabled. I thought you might reconsider. I appreciate your blogs. I hope you have a great Friday. Lu

You are just so good to me! I will reconsider. Thanks.

FEB

2008

Endea, Maybe Indy Mac had insurance on the loan. and may get paid loss difference? Was it a pmi, or government loan?

Wendy - It was an 80/20 loan no PMI - You know those kind of loans that are NO more! This is probably a good example why.

Thanks for your post.

FEB

2008

It destroys me to hear that. I have a solution to foreclosure without ordering a short sale. It is called the lowest unique bid auction. We just launched one a couple days ago online. Go to MarcusRealEstate.com to see how it works. I have been doing short sales for over a decade. I will never do on again.

Maureen E. Marcus

Licensed Real Estate Broker

MarcusRealEstate.com

FEB

2008

Thanks for posting Maureen I will check out the site.

FEB

2008

I think if you talk to agents that deal with lots of short sales you will unfortunately find several story's like yours. common sense and sound financial thinking doesn't seam to be on the top of some banks agenda.

FEB

2008

What happens to the balance on the loan with indymac? I am a seller w/ a 290k offer on a 330k loan. Should I pursue this route or just let them foreclose?

Sam

Sam - If they approve a short sale and accept $290,000. It would be better to do a short sale. A foreclosure will be 7 years on your credit. Check with your accountant to discuss what could possibly happen with the difference and what your options are.

MAR

2008

Option One did not list our place in the local newspaper as represented on the foreclosure sale document wand a small "group" purchased our house on the beach for $330,000 with the approval of the substitute Trustee.

Comps were over 600K and the last assessment and appraissels were for over 700K.

The outstanding amount was 625K .

Option One took a 300K hit. They didn't even bid to my knowlege. Inside job??? Anyone hear of that or possible illegalities??

I can't imagine parent company H&R Block absorbing that kind of hit repeatedly and surviving.

JUN

2008

Hi I am trying to negotiate with Indy Mac...My home is now worth far less than I owe..i hav ehad it on the market for a yar and had one verbal offer for a short sale and the buyer changed their minds. all indy mac will offer is to put the amont past due on the back and they want as much cash NOW....I have an adjustable rate that is terrible... we are sheduled for foreclosure in August...any suggestions?

SALLY--If you're going to pursue a short sale you need to price at a level that will attract the buyers. Right, you cannot worry about how much you think the lender will accept. Take in steps and the first step is to get an offer. Once you have a starting price then you should lower the price every 10 days to see at what point you can get an offer on the table.

The August timeframe you gave--is that for the court hearing to schedule a bank sale or is it the actual date the bank sale is due to take place. To me, it soundsa like a hearing to schedule the bank sale. If it is, you should go to the hearing and request another 60 to 90 days to try and sell the home as a short sale.

Don't ask the lender how much they will take--they will always give you an inflated number. They will not put their cards on the table so just play your hand irregardless of what they tell you. Also, don't take no as an answer--ask for a supervisor and just keep going up the ladder.

Do you have a Realtor?

I feel your pain Endea. ZTHis similar thing happened to me on two homes. One was with Countrywide, the other was with Saxon Mortgage.

JUN

2008

Jason, thanks for sharing your story--reconfirms my decision not to do short sales

JUN

2008

Perhaps there was a mortgage insurance carrier involved.

JUN

2008

This is so frustrating.

We found a house that the sellers are short selling with IndyMac. We made an offer and are still waiting to hear anything about it. Indymac says we can't even ask if they received the offer as we are not "authorized" on the loan number of the sellers.

So what you're saying is, wait for the sellers to stop paying the outrageously high note, get foreclosed on, then buy it as an REO? I guess that will take as much time as it is waiting for any word from IndyMac.

JUN

2008

Sometimes the reps for the lenders have less experience than they should...thats for sure

JUL

2008

Is Indy likely to accept a FULL PRICE offer with 20% down and a 30 day close on a REO home??? NEED TO KNOW ASAP! THANKS...

JUL

2008

Hello Ende,

I understand your frustration I just closed a short sale with Indymac and they are terrible they accept my short sale and they still foreclose on the subject due to the lack of communication between their departments lucky me I had them revert the foreclosure but they are very bad they receive between 200 packages and according to their reps only 15 negotiators.

JUL

2008

Glad I don't own stock in Indy Mac!

Now you know why they went under and their stock is at .49 cents.

JUL

2008

Indymac should close all short sales immediately. They need the cash. They can't sell the loans. It costs more money to foreclose.

If they immediately accept the highest offer on their short sales, they will unload the losing loans, get cash and who cares about the loss, they are over. They will not recover. They need the cash. If they had the cash to settle on thier depositors, the FBI might back off on fraud allegations. Get a clue IndyMac. You need the cash.

OCT

2008

i was an first time home owner and lost my job.. they refused my short sale thru an foreclosure company that were trying to keep me in my home.... now it is sitting vacant and whoever buy it will have to pay a lot more to repair it than its worth.

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