Bank of America Says If It Goes to Foreclosure, It Goes to Foreclosure. So What?

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Bank of America Says If It Goes to Foreclosure, It Goes to Foreclosure. So What?

I have a seller who wants to pay Bank of America the shortfall difference on a short sale, but B of A says let it go to foreclosure. We don't have time to talk about it.

I realize that many agents are struggling with short sales right now. Because the system is screwed up, and some banks in particular are almost impossible to work with. Bank staff are overworked, probably underpaid and buried in paperwork. I tell my buyers to throw out the short sale listings they get from me, because they're not worth the effort. Buyers can purchase a home that comes with warranties, where sellers will pay buyer's closing costs and the price is comparable to a short sale, so why should they bother pursuing what is guaranteed to become a headache without resolution?

Besides, some banks don't care.

Bank of America appears to be one of them.

B of A's loss mitigation department is in New York, which claims to handle all the short sales in the country from that location. We've been in escrow for two months. A negotiator, Tony Chestnut, is handling the file. I call him every day. The seller calls him every day. One day, about two weeks ago, Tony actually picked up his phone. This was before he figured out that if he lets all calls go to voice mail, eventually his voice mail box will fill up, and then he won't have to listen to messages nor answer his phone ever again. Pretty smart, that Tony.

While I had him on the phone, I asked him to look through the file to see if there was anything else he needed. He asked for an updated HUD-1. Looking at the appraisal, which came in about $100,000 less than the mortgage, he said he would approve the short sale but he needed to process the file before issuing final approval. He expected to have that completed, he said, within a week, two at most . That was two weeks ago.

This week, I called four times a day. Tony's voice mail box was still full, of course, so I transferred to loss mitigation. They'd dutifully send Tony an inter-office email and sometimes stick Post-It notes on his computer. But Tony never called. I finally left messages for Tony's boss, Keith. But nobody called all week.

The seller is willing to sign an unsecured prom note to Bank of America for many, many thousands of dollars. He would like to pay the bank the shortage. But Bank of America doesn't want to take his money.

After five days of calling four times a day, I got up at 5 AM this morning to call. The loss mitigation department said they would try to find him, but instead transferred me back into Tony's full voice mail box. I transferred my call back.

In exasperation, the call center woman asked, "What do you want me to do?"

"I want you to do get up out of your chair, walk across the room to Tony's office and ask him to talk to me." Finally, I threw in that I write for The New York Times, and I have documented this file from inception. I'm going to write about it.

The call center managed to get Tony to turn off his voice mail and take my call.

I explained that this is not your ordinary short sale, that my seller wants to pay them back. But also, the buyer is going to cancel if we can't get a short sale approval by next Tuesday. That's the 60-day deadline. And if we don't close, the seller is going to stop making payments, which means Bank of America will end up with this property in foreclosure, earning fifty cents on the dollar, if that.

Tony said to me, and I quote, "If it goes to foreclosure, it goes to foreclosure. My job is to process short sales." He promised to look through the file, follow-up on incoming correspondence from two weeks ago (which I picture lying in a mountain of fax paper on the floor in some closet) and call me back today. He didn't call back.

Well, you know what Tony? You aren't doing your job. You should be ashamed of yourself. You're costing your employer at least $100,000 by refusing to process a file that is complete and in front of your nose. If shareholders knew, they'd dump stock.

It's a shame that such apathy exists at the Bank of Opportunity.

P.S. I have to edit this post because I've been getting too many calls from people who haven't read the comments or haven't read the post following this. The fact is the short sale DID go through, at the eleventh hour.

UPDATE: Read all about how much I love, love, love Bank of America short sales in 2010.

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Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout the four-county Sacramento area. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. DRE License # 00697006.

The Short Sale Savior, by Elizabeth Weintraub, available at Amazon.com.

Lyon Real Estate is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.

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The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate.

Disclaimer: If this post contains a listing, information is deemed reliable as of the date it was written. After that date, the listing may be sold, listed by another brokerage, canceled, pending or taken temporarily off the market, and the price could change without notice. It could blow up, explode or vanish. To find out the present status of any listing, please go to elizabethweintraub.com.

Posted by Elizabeth Weintraub, Sacramento Short Sale Agent, Land Park, #00697006 Lyon RE on 03/22/2008 11:50 AM

Comments (177)

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Originally posted at: Elizabeth Weintraub • Sacramento Short Sale Agent • Land Park: Bank of America Says If It Goes to Foreclosure, It Goes to Foreclosure. So What?

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177 Comments on Bank of America Says If It Goes to Foreclosure, It Goes to Foreclosure. So What?

MAR

2008

Your story doesn't surprise me at all. I have some great asset managers, some of whom I actually have a real, on the phone conversation with once a week. They all say the same thing -- handling 750+/- files, buried in the paper, and depressed when they look at their voicemail because they know they can't possibly get back to everyone on everything. To have a short sale processor at BofA with such a jaded attitude is no big shocker. :(

um, wow, names and all! Watch out Tony, could be your last day.

Thanks for the input, Theresa. You'd think that Bank of America would sort these short sales into piles. People who want to pay them and people who don't. I'm betting the people who want to pay are a foot high compared to the mountains of those who don't.

I have a short sale with B of A since last October. They finally approved the primary loan 2 weeks ago...the second loan is still pending. This has been six month's...my buyer is ready to forget it...In the time that we put in the offer, the home has since dropped 30K and is probably not worth the purchase.

Here in Florida many of us agent's have been throwing cash and buyer's at the short sales to no avail. Bank of America is one of the worst...WAMU is running close behind. There are not enough processors. What I am being told is that they cannot find enough "qualified" people to make decisions and that the board of director's only meet's once or twice a month to make these decisions. NO WONDER THIS IS SUCH A MESS!!!! My processor is in Texas and has no idea what the market values are here...Don't even get me started on the appraisers!!!!!!!!!

Just had the same type situation with Wells Fargo. I think it's all in what type attitude you get to help you. Some just don't care and don't want to be bothered.

Thanks, Karen. At least Bank of America's appraisal came in at the EXACT price I told the sellers this property would sell at. Bank of America figures 90% of appraised value, including the costs of sale. And it is willing to pay a higher commission than some of the other banks. Of course, if you never get paid, who cares what they offer, heh, heh.

And Keith. At this point, I don't care about Tony anymore. Let the chips fall where they may.

I agree, Linda. If they can't return a call when they say they will, what good is their word? At least Wells Fargo has a good REO system in place.

Elizabeth,

The part of this that kills me is we are throwing OPM (other peoples money) at the banks to "rescue" some of these people (some of) who are victims of the sub-prime lending frenzy. Even worse, the banks are not being successful in approving the short sales, so the people end up in foreclosure and it ruins them for 10 years...then again, it's not them so they don't care.

I hear you, Karen. This guy wasn't a victim of the subprime mess, though. He was a buyer who bought a home that he thought he could fix up and his family would live. He got through the remodel, but his family had other ideas at that point. Not to mention, he paid way too much when he bought. Glad I didn't represent him on the purchase, because I never, never in a million years, would have suggested he pay that ridiculous price. He was hosed from get go.

Elizabeth,

Yes, I did understand. There are sooo many stories related to the short sale mess...

You make a very good point about:

"...costing your employer at least $100,000 by refusing to process a file that is complete and in front of your nose. If shareholders knew, they'd dump stock." My italics

This lack of common sense adds so little to help improve confidence in U.S. Banks and the Mortgage industry...argh!

Very interesting post, but I am a firm believer that short sales will be short lived. They were a stop gap measure that may have already out lived itself. I think the long and the short of this is the banks are out of money. It is like asking a person in critical care to donate 3 pints of blood ASAP! Why do you think the Fed is loaning money to stock brokerages when they've never done so before? Everyone is in a credit freeze, and there is no padding in price to mess around with.

MAR

2008

Elizabeth

Why is it that some companies are great to work with, and others just don't even begin to care?

Sincerely

Tom Braatz

I've been showing (and writing contracts on) a lot of San Jose short sales recently and unfortunately, I think what you've stumbled upon is a growing trend. The banks are totally overworked and understaffed.

I know an agent here who had a great offer on a short sale - it was almost full price, or "retail" as she said. The servicer for the lenders took 90 days to respond and by then the value of the property had fallen 10% and the buyers did not want to buy at that price any more. The delay cost the lenders $50,000 (but the servicer wasn't hurt at all!).

We are not yet at the peak of short sales. It's going to get worse before it gets better, I'm afraid.

Deborah and Jim: I see your point -- but did you also see where fingers are now pointing at Greenspan, saying you, you caused this mess with your rate decreases, yada, yada.

Tom: Why are some agents on top of their game and others asleep at the wheel? LOL.

Mary: I hate to say it, but I agree -- it's going to get a lot worse. I suspect this is just the tip of the iceberg. There are some neighborhoods in Sacramento where every other house is a foreclosure. And there are neighborhoods where the impact is much less severe, but none is exempt. There are foreclosures and short sales in affluent areas, just not as many.

Elizabeth,

What you say about BofA doesn't surprise me at all, I have never cared for their customer service, but it's indeed very sad the lack of caring Tony Chestnut has shown. I have had a pleasant dealing with Wells Fargo on a pending short sale. We got approval within 60 days, should be closing in three weeks. I am working on another short sale listing with HomeQ and they seem to have their ducks in a row, although we are just getting started with the process.

I know you will continue to do your best for you clients, trying to overcome the roadblocks that are out there in the short sale process. In the end, though, sometimes the roadblocks are insurmountable.

Yeah I think many banks PREFER to foreclosure. Maybe it is a better tax write off, it is amazing to me.

Elizabeth,

First congratulations on your feature, you deserved on for this post!

Secondly, from what I heard from one bank, they don't care if they go to foreclosure b/c they will relist them at more than the amount owed and make a profit back on them. Then again, this "informant" also said that they don't think banks are legally allowed to do this. Are they? Do you know?

Do you think they would do this if it were their money. I am guessing not every file they clear most likely means they get a new one so delay and maybe you will stop calling and he can get in afternoon break in at 2:30. Much more important than protecting his employers assets.

It sounds like the bank didn't have any reason for doing this. An unsecured promissary note? I'm also curious as to how names can be called this way in a blog. I just got a letter from an attorney saying if I didn't take down a blog that someone thought was hurting their business, they'd sue. You can bet the blog is down.

I agree elizabeth saxon mortgage does not care either, they refused an offer at $462k with the seller coming in with an additinal $2000 and willing to do a promissory note only to foreclose and have the reo agent list it at $454k. That really baffled me.

When I explain my buyers previous experiences with short-sales, people are no longer interested in looking at them. I guess I don't understand why the banks even bother with them if this is how the majority seem to end. What a waste of time and money.

Elizabeth, This scenario is becoming all too familiar ! No wonder buyers are refusing to look at this type of sale.

We've found that we get a faster and more favorable response if the owner stopped making payments after listing the proprty for sale.

As long as the bank is getting their money, where's the incentive for them to short it?

I only wish you listed his first AND last name! What a total disgrace not to say the aggravation for all parties (Tony exluded.) I hope you'll write a followup and let us know how this plays out.

Great featured post Elizabeth. Congratulations. I have heard the same thing about headaches with short sales and the indifference on the part of the banks. Banks are about money, not selling houses, and people's lives. We have agents in our office that specialize in this area, but I think for the generalist agent, maybe just steer clear of them for the hassle and the time factor. Have a Happy Easter Elizabeth.

Excellent post Elizabeth.

I wrote a blog post recently about my horrific situation with ASC/Wells Fargo.

If you do a search on the Internet for ASC/Wells Fargo Ripp off, you will be amazed at what comes up. I don't know what is going to have to happen to correct this situation. It will get worse before it gets better and a few years from now...we will see a different problem with short sales...the ones where the sellers of these properties start coming back after the listing agents for not getting the job done correctly...unexpected deficiency judgments popping out of the woodwork etc. Once the dust settles with the banks, they will be coming after anyone they can to get paid...warn your sellers and cover your butts.

I recommend anyone considering getting into short sales contact their attorney first to see what they could be held liable for. And please, inform your sellers to first contact an attorney and try to work out a deed in lieu of foreclosure before agreeing to take a short sale listing. Short sales should be the last effort before foreclosure...not the first step.

HI- That response from Kristi is scary about the sellers coming after the listing agents. I will be so glad when we get past this time of short sales.

My advice don't touch any short sale with a barge pole. Wait until the bank has foreclosed and you can deal with them, it will probably still take some time to get offers accepted but you don't have the seller to deal with. Why would the people at the banks care whether the home goes into foreclosure they still get their salary at the end of the month, you are just a file on their desk, I'll get to it when I can attitude. Good Luck

Your information does not surprise us at all. We have similar situations going on with other lenders as well. It's all a sad state of affairs.

Elizabeth, try asking Tony's supervisor to transfer the file to Dave Nowak if he is still there. Dave isn't any better about returning calls either, but he got my short sale done when my seller paid a $10,500 in short sale contributions to Bank of America.

And you are right. Bank of America doesn't care at all. I fired them from being my bank in 1999 and have freely advertised to anyone who would listen why they shouldn't do business with Bank of America. This is just another reason.

I think this is the same situation no matter where you are in the US! These loans were all sold off and no one ever thought they would get bit on the ass by these loans...of course they don't have the qualified staff! I don't understand from the conservative side how and why a business justifies foreclosure over a qualified buyer, and minimize their losses? Instead they will spend $40,-60,000 to foreclose and then also loose the difference in appraised value to the loan amount! GO FIGURE! And then my TAX CONTRIBUTION is funding lenders bottom line so they don't look so bad to their stock holders...yet we struggle to sell homes for them? What gives!

Fran: This seemed like such a slam dunk at its inception. But you never know how these things will go. The ones that on the surface appear to be a huge hassle, sometimes are very easy.

Susan: That's been my experience. They prefer to foreclose.

Karen: So, THAT'S why my BB has been jingling all morning. I don't believe I've had a "featured post" before.

Terry: If it was "their" money, they'd be in Mexico on the beach, not pushing around paper.

Barbara: People sue over untruths. Let 'em at it. But an unsecured prom note is better than a secured note and deed of trust that has no security.

Mike: I feel your pain. I had a similar deal a while back. Offered the bank $220,000. In the midst of negotiations, it went to Trustee's sale. Then at REO at $300K. Now, it's reduced to $235KK. It will likely sell at or below the short sale offer, and this is 10 months later.

Doreen & Bill: I wrote an article about Why Short Sales Are Not a Bargain. It contains 11 points. Maybe one of you can come up with a 12th?

Diane: But I did list a last name. I have no shame. :) I know how this will play out. Come Tuesday, the buyer will cancel. As I told the selling agent, only a miracle will produce a short sale approval by then, and I'm flat out of miracles.

Gary: Happy Easter to you, too. I'll be presenting an offer at 8 AM tomorrow morning. Maybe I'll get back in time for brunch.

Kristi & Pam: When I take short sale listings, I give sellers a document I created to sign that says I do not advise them, have not advised then, will not advise them, and they should discuss options with a lawyer.

Bob & Carolin: The only thing good to come out of short sales is the listing price tends to drive down the active listing prices around them.

Karen: Thanks for the tip. I'll ask about transferring the file on Monday. But, of course, I'd have to speak to a real live person to get that done, and Tony's boss isn't taking my calls. I hear he's so new he doesn't even have an extension assigned yet.

Ray: What gives is we expect compassion and a human response, which, sad to say, we aren't gonna get.

Sounds like a lovely guy to deal with. More likely then not he's underpaid,overworked and under appreciated. Well he chose that line of work. He has to live with the consequences. He should find another line of work. That's why it's taking so long to move these properties. Noone cares (REO banks).

Not all of BOA's short sales are handled in New York. Send me the deal..we'll run it through on our end with our BOA contacts..always looking for ways to do short sale deals..love em!

This is so ridiculous - and true - I am currently waiting on not one, but a few short sale answers - I wish my buyers would like other houses - short sales are a bit like false advertising in my eyes...not intentional of course:)

I started a short sale with B of A 5 weeks ago. With in the last week I finally have a assigned person to my contract. They say they will order the appraisal this week and have me a decision right after that. If it happens the way they say everything should be great but if we get swept under the rug for another 5 weeks it will most likely kill the deal. I guess we will just have to see but for what I'm reading here I better not hold my breath.

I've shared similar experiences with banks...most just don't seem to care.

I recently heard that banks would rather a property be foreclosed on than do a short sale because the mortgage insurance company takes the hit instead of the bank.

Has anyone heard that, and is there any truth to the rumor?

I just tell buyers to walk away from short sales. With so many homes on the market right now who needs the aggravation?

Thanks for sharing your story. It truly is eye-opening.

Maybe Tony Chestnut doesn't know about Activerain.com. Because if he did,he wouldn't act like the way he did. You don't want to tell people to walk away from short sales due to the aggravation,but what can you do Great post Elizabeth.

The loss mitigation advisor seems to be following a common protocol which is a gambit used, by design, to take advantage of an anticipated decline or increase in market value based on market conditions, whether or not the situation is considered a local one. Lenders seem to be applying this technique across the board to stall the sale, derive a better position, and roll the dice on a short sale or a foreclosure. Sounds like they're playing craps with your seller's home. Why do they call these people loss mitigation counselors when their behavior is spartan and creates unnecessary anxiety for you?

Good luck...

Thanks for the link. I actually get your newsletter, but sometimes keeping up with all the reading... :)

This is all the more reason why banks shouldn't be in real estate. One, they aren't held to the same rules we are. Two, they make up their own rules. Three, they don't follow any rules. We are held to professional standards and a code of ethics, bank staff seem impervious to any standard. It might be pointed out to both BoA and Wells Fargo that they would save millions by hiring a few more people to process and expedite short sales.

Elizabeth this is horrible, and I had a similiar situation with Country Wide. How much does Tony get paid and hour? hump...............

They don't care. I hope Google indexes this and many people read it.

It is so sad that these homeowners are just 'files' to the processors, not people with names and faces and families. By taking months to process these files, with prices decreasing and potential buyers walking away, these processors and the banks that they work for are helping to destroy peoples lives. Hire some more people and they'd save themselves some money. You have to spend money to make money, right? So banks - hire more people and cut your losses. And what about all of our tax money going to help bail people out? Wouldn't need as much of it if these procesessors could process and get things through the system before prices drop more and potential buyers walk away. Who wants to deal with a six month process?

Eliz..I went into short sales full bore about 7 months ago, and we began filling up with listings..Before I knew it, I was so busy I could hardly take time to breathe...I had over 70 files working and a staff to sit on hold and fax CASH offers from investors...WHile I won't say that I didn't end up doing well, I will say it was not from closing the short sales.

I have stated on here and anywhere someone will listen to just wait for the Reo..it will be clear title, and most usually, for less than what you were bidding months before. I have even quit going to auctions with our investors, we just start putting offers in AFTER the AUCTION ...By that time it has been placed with A SINGLE person whose job it is to move the property...I suggest you take your ready and willing buyers to very motivated listings that are ready to close NOW...My time is too valuable to work with a known 80% failure rate....The only ones making any money in the actual short sales end of the business are the seminars and books & cd sellers on EBAY.....Best wishes.......good luck

Elizabeth, great post. I currently have an REO here in Florida. I have two offers sitting on the table for it and the bank has still yet to respond. I call the asset manager 3 times a day and he tells me the same thing, "still waiting to hear if the bank approves it". I had it last Thursday and told him you tell whoever makes the decision that they are about to lose the best offer they are going to receive on this home and the property is going to sit for moire than year. Furthermore, they'll end up settling for less than what is being offered currently. The banks complaint about people and their unwillingness to pay the loan they gave them, but until we start complaining that the banks are taking months to approve deals then everyone will understand why the crisis is as bad as it is.

That's awful. I can't believe he just didn't answer the phone. How is that doing his job? Who is he helping. He's certainly not assisting BofA and he's not helping homeowners.

I like the idea of saying you write for a major newspaper. Seems like that would get a few people off their dead a$$es. Great idea. Too bad in the end it didn't work out.

In my market, less than 5% of shortsale listings ever close escrow. The rest become REOs. I've gotten to the point where I won't even show them.

Thank you your sharing your experience. I also experienced a similiar situation but it was not with B of A. But your're right, there are some banks that don't have a care in the world wether or not its foreclosed on.

Whatever lender figures out how to navigate the paperwork the fastest,,,,,will be the winner. They know from the beginning what number is acceptable and if they want to have a scale that changes with time, that sure can be understood....to make buyers wait for eternity costs everyone money.

Again. I have to say its not worth the time to deal with them for the short sale ..The only other benifit is in buying them subject to...if you can find them early enough to make it worth your while.. its certainly not worth trying to hold onto a retail buyer for a deal that will probably not go thru

I am so glad you wrote this. It is a terrible situation and I can't believe that even though the seller would PAY, that they don't care. What about the stock holders? I think they would want the short sell processed since they are getting the full amount! Silly!

MAR

2008

I've had a few real successful short sales recently, but through First Horizon in TX...I have heard from other sources about BofA's loss mitigation, and dread a deal with them, but they probably are woefully understaffed and trained to deal with this mess.

Elizabeth,

It's sad to read how some national banks operate during this mortgage mess. They don't seem to be prepared to handle short sales, which then obviously means they rather foreclose than do a short sale.

And this is exactly why so many agents avoid showing short sales and the sellers end up no better off than before and the mess just keeps getting worse. Where will it end?

The biggest issue with the whole short sale process is the buyers that want the great deal are not that patient. Most of my buyers that write an offer with an agent, give the banks 10 days to respond or the contract does an auto cancel. Most of my buyers are now avoiding short sales like the plague and have moved onto working with regular sellers or REO's. If your seller has the funds available thru other channels, I would tell you to cancel the short sale, sell the property and have your seller bring in some hefty funds to close. It seems these days that the only properties the banks move quickly are one's that they own.

ELIZABETH - Thank you for sharing this. I have it bookmarked, and plan to send it to any buyers that are looking to purchase a short sale. I think that short sale purchases are fine for investors, but the average homebuyer does not want to go through all of this drama to buy a home. The worst part is that they may never end up buying the home anyway, so a lot of time will be wasted. Congratulations on a well-deserved feature.

Elizabeth,

WOW! - I was just thinking about how the whole current fiasco and the way banks are dealing with it (or the lack of) and wondering how their investors (stock holders) would feel if they really knew what was going on.

Your post was so good that my original comment had really gotten too long and thought it would be better to just link to it from my blog with my thoughts about your article since I've been writing about the headaches of Las Vegas short sales.

Maybe if everybody links to your post from their blogs something will get done about the way the banks are handling them. At the end of the day, all of these employees of the banks really work for people who own stock in these companies. Your article is really spot on highlighting the problem of dealing with lenders and short sales - Especially when you have a seller willing to pay back the investors of the mortgage.

I've heard from more then one short sales agent in Las Vegas who had a deal put together and the bank would not approve the sale and let it go to foreclosure. Only to end up selling the property for a lower price then the agreed upon short sale!

It seems that the lending institutions would rather lobby for federal taxpayers money to help them out instead of helping everybody out.

Has anyone had any short sale dealings with Countrywide? They are on their 3rd appraisal for a short sale property of mine. They don't even have any knowledge of the 2nd appraisal they did 2 months ago.This has been going since Dec. Buyers are ready to walk.Contact person no longer available. In fact calls are now being routed to India, and then back to the U.S. Thanks for helping to expose these banks and the people who work for them! Cynthia

Debra: Banks do not have insurance that pays them in the event borrowers default. FHA loans, however, are insured. VA loans are guaranteed. But conventional 80/20s are not. That's what constitutes the bulk of our loans in CA.

Hey Keith: You said: I like the idea of saying you write for a major newspaper. Seems like that would get a few people off their dead a$$es.

I wasn't making that up. I am paid by The New York Times to write for About.com as its home buying & selling columnist.

Paul: Linking is a good idea. Thanks!

I can't possibly keep up with these responses now, but I will try to later.

I believe that short sales are a black hole that was created just to suck us all in and watch us spin. Sellers don't know what to do, agents aren't educated about them and banks are clueless. It is a vortex that is causing more harm than good but in our current market we still have to deal with them. By the time you manage to get an answer on most of them they go to foreclosure and you have to start all over again.

It seems to me that the lenders who are in BIG trouble (facing bankruptcy themselves) are more willing to unload a property through the short-sale process.

My own personal experience was with EMC, and while they were a little on the uncooperative side, they got everything done extremely fast when they needed to. EMC just happens to be a part of Bear Stearns. No shocker there on why they want to unload properties instead of holding on through foreclosure and beyond.

Any lender that is 'no longer with us' such as Fremont or First Magnus etc... is all too happy to downsize their portfolios. Bank of America is probably being a little too cocky for their own good, and a reality check is sure to come to them after the Countrywide dust settles.

What a pain, without any outcome. This is why I prefer my clients use my loan officer for their loans, because B of A is full of order takers who have no vested interest in the client and their final outcome, obviously whether it's with a new loan or a short sale.

I feel sorry for your client.

Courtney: They are false prices. You are correct. I tell my buyers the prices are fabricated, made up out of thin air, and they are. Unless the listing agent has short-sale approval from the bank, it's anybody's guess. And a lot of agents are listings homes as short sales when they have no idea whether the situation qualifies, and they purposely pick low prices to attract attention.

It used to be that a seller needed to be in default to be considered as a short sale, but as of the last six months or so, that is no longer the case. I've worked on several short sales in Sacramento that were not in default, and the lenders were motivated to work with the seller to keep it from going into default.

On the other side of the coin, there is a tremendous amount of pressure on banks right now to keep properties from falling into default and / or postponing filing a NOD. I have a short sale listing right now where the seller has not made a payment since October, and the Notice of Default has not been filed.

WoW.... I can't believe they would say something like that.... You would thing they would want to get their money.

Elizabeth

I'm not familiar with CA foreclosure laws as I work in Michigan. I'm also not an attorney nor am I giving any legal advice. I do a lot of short sales however and got a real great idea just the other day.

If you are a judicial foreclosure state, have your client petition the court under the foreclosure action started by the lender for a show cause hearing to delay the foreclosure since the bank (B of A in this case) is not acting in good faith. I assume that you and your client have been documenting your attempts to contact the lender and their hard working (ha, ha, ha) representative Tony.

Also, if your loan is a Fannie or Freddie, contact them directly, let them know that you have a workable short sale with a client who is willing to continue to pay on a note, and ask them to call Tony's supervisor. This strategy has worked for me in the past and has yeilded a return call from the rep assigned to my short sale that same day.

Good Luck,

John

Banks didn't get in the situation they're in by being smart.

Congratulations, Elizabeth on your featured post. I have heard that there are some banks not worth working with, but I feel that can change by the week! If you don't mind, I think I may write a short blog on shortsales and send people in my market over to your post. I believe many clients are frustrated with their agents and even finding a lack of trust in their ability to manage a deal. Your post certainly shows an agent who is on the ball, following up, has years of experience and yet is working with a bank who cannot move. Good luck. I do hope your deal goes through.

My heart does actually go out to the banks. In many cases, banks did try to avoid this situation, but various political/lobbyist groups forced banks to ease up on lending standards to expand on the American Dream. Now, even those who were good credit risks see Short Sales and Foreclosures as an acceptable, if not trendy thing to do in 2008. While they would never have thought to walk away from their 401k's in tough markets, they feel they can simply "stick it to the man" and walk away from their $100k loss of value on their home and rebuild their credit later. The funny thing is, if they would simply wait it out, they'd be better off in the long run. I am not talking about people who have ended up divorced, widowed, out of a job, or even sick/disabled. I'm talking about the healthy families who have that sense of "entitlement." AND about families who are currently buying second homes knowingly planning on walking from their primary residences.

And I thought just Countrywide were the only ones having fun. It is an ugly time in their industry.

One of the reasons, I believe, that I feel so drawn to you and your posts, Natalie -- even though, in many ways, we are worlds apart lifestyle-wise -- is your sense of humanistic value and caring that goes into your writing, which is evidenced by your beliefs. Many people do feel entitled to walk away and want, as you word it, to "stick it to the man." Perhaps as Jack Black would put it, too.

I showed a pre-foreclosure home in Midtown Sacramento Saturday to a couple (one of three showings that day). I warned them about short sales beforehand, but they still wanted to see it. I believe they were simply misinformed and it was up to me to provide them with information. If, at that point, they wanted to pursue a short sale, I more than likely would have referred them to another agent -- without a referral fee because nobody in his her right mind pays a referral fee on short sales. It would have told me these prospective buyers were insane.

Fortunately, I think what I had to say made sense, and they are now pursuing other avenues.

That's one surefire way to qualify your clients. Ask them, "Do you think short sales are a good deal?" And after you're finished explaining it, if they still want to pursue a short sale, send them to somebody you really don't admire -- perhaps across town.

MAR

2008

Update from Bank of America. Tony called me this morning to say the short sale will be approved today.

I am stunned and speechless.

Welcome to the wonderful world of short sales! I think we'd be well on our way out of this slump if they had retrained everyone they let go to process these deals. These homes often have multiple offers and the other buyers could be on to the next home instead of waiting in line for a "what-if".

It's not just their loss mitigation department...it's BOA...we were told once that we were going to get a loan approval with over 800 credit scores for a new building...i heard through the grapevine that they wouldn't approve the loan because there were restrictions to the flood insurance on the building...I told my broker who was vice president...he said no problem 3 months earlier...10 days before the closing ...I received a call from the president apologizing that they wouldn't approve the loan...I even was willing to pay separate insurance in cash...they refused..we were stuck if we didn't close. we ended up closing all cash and actually saved on closing costs ..we had to liquidate funds and pay a small penalty but we still saved 2500 in closing costs..and we had three loans that we immediately pulled from them due to the fact that they flat out lied and left us sitting. We both have over 800 credit scores yet this was the way they treated their best clients. And this wasn't even a short sale!

By the way ...any loss mitigation department treats all of the short sales the same regardless of the situation...it's who is on top of the pile that gets looked at first and you better be prepared for 30-90 days before you get your answer. We just closed one in 47 days and had the short sale package prepared ahead of time. I'll never do business with them again...even though my Countrywide loan is still technically going to be with them but under the older name.

Amazing! Does he subscribe to your blog? :)

If he read my blog, he would have offered an apology in-lieu-of an explanation.

You're right. He definitely should have...

Did you get a written response yet? I've had short sale deals been verbally "approved" only to be rescinded later. I was thrilled to relay that message to my clients!

Elizabeth,

Good for you...someone was paying attention or someone who read's here know's Tony!

MAR

2008

It is amazing, but the government is trying to have us believe that the lenders are trying to help the homeowner. I do not believe this based on your story and my experience with these lenders.

I guess I'm lucky to have had my short sale listing go through to closing even though it was a royal pain. I am now waiting with a buyer going on two months and they're getting antsy and ready to start looking again, even though I told them my previous short sale listing took a bit over three months to get an acceptance.

I had a much easier time handling a foreclosure. They had one offer and accepted it pretty quickly and it got to closing. However, it was handled by a third party who referred it to me and I don't think the commission I received was worth the effort. It was the first one I handled this way and don't think I'll do it again.

Unfortunately, I have another buyer taking a 2nd look at a short sale and have already warned him. I just don't think many buyers understand what I'm trying to tell them.

Tony from Bof A also has a short sale file of mine and it has been a long time, since November 12th of 2007. I have heard from him twice but never spoken to him.

Tony if you are reading this please call me!

Hi Cami: Yes, I did receive a written response and the short-sale approval letter.

Judy: From now on, if a buyer says they want to pursue a short sale, I think I will tie them up and hang them from the highest tree by their toes.

Elaine: The squeakiest wheel gets the grease. Keep calling. And plead with the loss mitigation call center people. Just press STAR and ZERO when you hear that Tony's voice mail box is full, and you will be transferred to their extension.

If you are not using an attorney in your negotiations, you should. There are many ways an attorney who knows the ropes on this can get the deal done.

MAY

2008

I can't help but to think there isn't more going on here than just an overwhelming work load and too few employees to move these properties. I am so happy to see this issue finally getting the exposure it should. Is there something going on here that we don't know? Banks do not turn away money. They are too money grubbing which is partially why we are in this mess in the first place. Why are banks sitting on these properties. I just can't help but to think they are waiting for something. What is their motivation? I am a buyer and on my third attempt to buy yet another property. I am not seeking Short sales they seem to just turn out that way. There are so few "qualified buyers" out there and so much inventory. I just don't understand why banks aren't jumping on the opportunity to move this. Prices are dropping monthly, homes are sitting empty and it just doesn't make sense. I just can't help to wonder what is really going on.

MAY

2008

Hi Laura: Since I wrote this blog several months ago, the climate has changed a bit. Now, I am finding that banks are more quickly responding to short sale offers. But there are also multiple offers on many short sales. I have clients who were just approved yesterday to buy a home at about 65% of its existing mortgage. There were 4 or 5 other offers and, at one point, one of those offers was about $100,000 higher than my buyers -- lots of people wanted this home. But, then, the $100K-over-list buyers dropped out because their own home fell out of escrow, and it was a tight race between my buyer and another offer. My buyers raised their price a smidgen and won the offer. But I'm not saying it was an easy road. Just that banks are responding a bit faster.

The other thing that is happening is buyers are thinking that since prices have fallen, they can offer a lot less than list price, and that's not how it works. Most homes are selling near list price within the first 30 days because they are priced right -- at or a bit below comparable sales. So, if you're ready to make an offer, look at the comparable sales and make an offer based on those -- the list price could be totally irrelevant. And make offers on homes where the listing agent is aggressive, experienced in short sales.

MAY

2008

Keyshaun, I saw the comments- and NONE of them were from members. They were all anonymous, and not very enlightening either. They sounded like they had something personal against the agent, not anything productive to say about the situation. That's probably why they were removed.

Both sides are shown on this thread, but it comes down to personal experience. So, when someone states their case against BOA's cavalier behavior- that is based on experience- which is REAL and valid. When someone states the other side- like the fact that BOA probably has 82,000 files on their loss mitigation unit's desk, then that's reality too.

There are no 'sides' here- just opinions based on experiences.

How come all of the other comments that are posted without a name were not deleted then?

Colleen- I don't think I have the time to go through each comment to see how many are from anonymous people. Was there a specific remark you are referring to? Also, if the other comments added something of value to the discussion, then I would imagine they were left up for that reason. Did you have an experience with Bank of America (or any other loss mitigation department) that you'd like to share?

Ok. thats fine. I dont have anything against anyone so I hope I didnt offend anyone.

I was refrencing the note that stated previous comments were deleted because they were from "annonymous," however several other comments have no names listed, but were left on the site.

I find it upsetting that Elizabeth had such poor service, however I don't think the aspect of the banks being an actual business is being taken into consideration.

If you went into a family owned gas station, would you expect the cashier to take 80% of what you owe for your gas? No. So why is it that people expect banks to do this?

Of course no one wins when a home forecloses, except possibly the attorneys. The bank will lose thousand of dollars. Which is why the short sale program & others like it, were designed. However the banks still have to answer to investors, state regulations, as well as their own company. It is not just the bank foreclosing on your home, as it is not just the bank who loaned the money in the first place.

When you have a debt, it needs to be repaid. Banks are working more & more on updating assistance programs, but it takes time and also assistance from the government, changing regulations and laws. I think all of those things should be considered as well.

Colleen- 80% is better than nothing... and as far as banks go- they lend REPEATEDLY on these homes. All they care about is interest on the money- they don't care if you EVER pay down your loan! Homes that go into foreclosure and are sold off, are then FINANCED again by someone else- who pays interest on the loan. Don't cry for the lenders here, they make out just fine.

Well it's a shame you see it that way

If you went into a family owned gas station, would you expect the cashier to take 80% of what you owe for your gas? No. So why is it that people expect banks to do this?

The reason people expect banks to do this is because the properties, in your example, are most likely worth 20% less and cannot be sold for the loan amount. If the owners are in default and cannot work out an acceptable arrangement with the bank, they then must sell the property or let it go into foreclosure or give the bank a deed-in-lieu of foreclosure, assuming the bank will accept the deed. Why sellers stop making mortgage payments is another story in itself, but that's not the issue here.

The issue is whether the bank will accept a short sale or let the home go into foreclosure. In my professional experience, banks typically make more money on a short sale than they do by taking the home back in foreclosure. Given those two scenarios, which would you choose, Colleen?

You can argue until the cows come home about whether owners should go into default, but the reality is they do. How the banks respond to its investors is paramount; protecting the investor's interest should be foremost. By not responding to short sales or handling the transactions in a timely manner, banks are hurting their investors. And I'm not singling out Bank of America. Almost all banks are understaffed, overworked and, as a result, customer service falls by the wayside.

MAY

2008

I agree. But there are also policies and laws banks have to follow, which vary state to state. So to state that the banks, whichever bank you want to discuss, are the ones who are unwilling to help is not the full reality. Like I stated, the banks lose money in foreclosure, which I am sure they don't want either, but it may be the only choice based on the laws that we have in order right now. Which I feel need to be looked at, and altered as well. That was all I wanted to discuss.

Folks

Not sure if anyone has addressed this in the last 99 replies, but from the banks' prespective short sales have a HUGE impact on the bank's bond rating and ability to borrow money. That's why you are seeing "institutional" resistance to get them approved.

Let's face it, when a bank approves a Short Sale, it's an admission that the assets they have on their BOOKs are worth 30-75% less than the outstanding loan! This does a number on the bank's ability to borrow more money and Wall Street confidance.

MAY

2008

That's a good point, Homestrech. However, for banks such as Bank of America -- which struck a deal with Countrywide to take over its mounting foreclosure obligations -- declining book assets aren't really a surprise, I'd imagine.

JUN

2008

I received an offer on May 5th for a property I am listing (great offer) 160,000 with seller contribuiting 5,000 dollars for closing costs. House had already a sale date of May 22nd. I was lucky to get someone assigned to the case by May 19th and he suspended sale after I emailed all of my clients financial info and HUD. Appraisal was ordered last week and just when I thought we where on a positive strike, BOA comes back to say they cannot pay for closing costs? Was this your case? Jim Pellegrino from loss and mitigation claims it is Banks policy.

Some good points about Short Sales, and how it affects the banks ability and rate to borrow funds. Certainly a contributing factor to the foreclosure mess. Over worked and underpaid Loss Mitigation "experts" are buried under mountains of paperwork. In the end... they only end up costing the bank a fortune in legal fees as these cases move into foreclosure compounding the bad debt even further. Stock holders don't get a vote on that issue.

Many took a stiff spanking in the Florida Market when they would not consider a short sale, foreclosed and eventually lost 2/3 value on the property they rushed to obtain at the courthouse steps. Becareful what you wish for...you just might get it.

Hi Claudia: It's rare that a bank in a short sale situation will pay any of a Sacramento home buyer's closing costs. When I see an offer from an agent that includes a request for a credit or repairs or inspections, it tells me the selling agent is new at short sales. In my transaction, nobody asked the bank to give the buyer a credit so it never came up. The bank did tell me that it sticks fairly close to the comparable sales when considering a short sale.

Hi Alison: I've been lucky in that I've closed all my short sales this year with the exception of one that blew up yesterday. At the final hour, the bank (not BOA) decided the offering price, although over list, was unacceptable, and it refused to issue a counter.

JUN

2008

Countrywide seems to be the worst.

I have a client that we have been trying to negotiate an approval or denial for since December 2007.

Jill Balentine, Senior VP of Home Retention Division for Countrywide stalled the process. Ken Scheller, her boss, seems to have no control over his staff.

Their reply to numerous emails and phone calls was "We have notified our internal counsel and they will handle directly". Further calls to the "internal counsel" and to Ms. Balentine and Mr. Scheller by myself and the client's attorney were NEVER returned. The only time a response was received from Mr. Scheller was when I cc: Geri Willis of CNN on my email.

His assistant called to say "internal counsel was handling it because it was in Litigation (Foreclosure) and he could not discuss it." Strange....seing as 98% of Short Sales are in "Litigation".

I spoke to Deutsche Bank, the investor. They said "Unfortunately Countrywide was given complete Power of Attorney to negotiate all loans"..."but if you speak to Ms. Balentine, ask her where she THINKS will be working once the Government gets done with them".

I guess I will just have to start calling her cell. She called me from it once...I saved the number.

Anyone else want that number?

Jim Piskorowski RRESINC.

I wouldn't hestitate to call the cell. But she might have called you from that number because her voice mail box is full. She knows you can't call her back because she might let all calls go to voice mail. And since her box might be full, you can't even leave a message. Lots of people know and use that maneuver to cut down on phone calls. Which then adds to your frustration. I certainly feel your pain, Jim -- been there and done that.

JUN

2008

I am relocating with my company as my job is going away in the next few months and moving to another state. My company is agreeing to purchase my home however I live in Fl and the value is about 100K less than what I paid 1.5 ago. My company is willing to pay off the entire loan less 40K to the Bank. We have submitted our paperwork to BOA and have called for a few weeks now trying to get someone to help us. This is not a buyer situation as my cmpany is buying the home, however I have to accept the offer by Aug 4th or I lose thoe offer, job and eventually the house as we will not be able to afford the payments.

Does anyone have any suggestions on how I can position myself to get my short sale approved, or do I need to just plan to lose everything??

Any advise would be appreciated.

Thanks,

Personally speaking, if I was in your shoes, I'd take the job and relocate, regardless.

Although, please realize that this IS a buyer situation. Just because your company may be a corporation it is still a buyer.

Somebody should be calling the bank every single day, preferrably three times a day, to get an answer for you. Do you have an agent? BOA is way behind processing its short sales, so don't expect a prompt response. Just keep calling or hire someone to call for you. I got mine closed in two months, but I didn't start calling the bank until day 28. That's because the seller said he had a good relationship with the bank and would get it done. So actually, from the time I got involved, it was about four weeks.

JUL

2008

What really scares me is that BofA is taking over CountryWide! Not that I'm a fan of CountryWide, but they are least willing to work with Buyers & Homeowners to keep the homes out of foreclosure (at least in my experiences) Can you imagine what BofA will do once the transition is in the works?

AUG

2008

I am a client from BofA who cannot make my payments anymore. Tony was "handling" my case, it went nowhere. My property is still appraised at the value they told me to list it for over 6 months. I requested deed-in-lieu: DENIED. I requested short sale (since the few sales in the community had been short sales much lower than my property). I asked the BoA dispatcher to get me someone. Now Josh Feldmeyer is "handling" my case. He was actually able to talk to me once - he said he needed to talk to my realtor to order an update to the appraisal they did to see what should be the "right value" and see if a short sale is allowed. 4 weeks later, he has not called my real estate agent. I called BoA, voicemails are full and the dispatchers are always angry. Unlike other customer, I've been calling them months before I was unable to make payments, and they did not do anything. I used to have 2 jobs in order to pay the mortgage, but they are allowing my excellent credit to go south. If BoA actually commit to that they state, things would be much better. I read this blog and I am stunned by BoA not "having time" to have the owners pay the difference of the short sale. I was hoping to be able to do that or have them work with me. Now I don't know what to expect.

Well, if you read the next blog, you will see that B of A finally DID respond, and it did allow the short sale. It took repeated calls -- like 3 times a day -- every. single. day. But it happened.

Let me say, though, that I am very sorry this has happened to you. Oy. I know first hand how hard it can be, and from a homeowner's perspective, I can only imagine the agony. I wish there was something I could do to help you, but the best I can offer is to try pushing your agent to keep calling them. The squeaky wheel gets the grease -- and you've got to be NICE about it, even though you may personally want to strangle them.

Try calling at 7:59 and 11:59 and 4:29 (they go home at 4:30 in New York), on Eastern standard time. Also, hang on the phone to be transferred to the main loss mitigation department and if your story is sad enough, you might be able to get one of those people to track down your Josh for you. But whatever you do, don't give up. You could be one of the lucky ones -- even though it might not sound that way right now.

AUG

2008

Are you people serious? BofA has been like this since I was a kid, 60 years ago. I am amazed that anybody will do business with them.

The good news is that Tony singlehandedly helped BofA lose 50 billion dollars in value. Way to go Tony.

Elizabeth. I dealt with BofA last year and it was a nightmare. House DID GO TO FORECLOSURE and I do believe they don't care. Listed the home in July 2007. Got a FULL PRICE OFFER August 2007. In October (yes October) the bank sent out an appraiser from OUT OF THE AREA who appraised the property higher than I had it listed for. Buyer (unbelieveably) wanted the house and agree to pay APPRIASED VALUE.

In November, still no reply. Now we had a full price offer, rejected. A higher than full price, appraised price, no response for 5 weeks.

Buyer walked. It is August a year later> The house is vacant, falling apart, totally deteriorating and in foreclosure. They get what they deserve (meaning the bank). Ridiculous

Hi DeBee and Erica: I have edited this post to reflect that with hours to go, B of A did eventually approve the short sale.

Well the banks wanted to be in real estate for years I hope BofA has some employees to enjoy living in their holdings. Maybe even a stockholder. I am sure we as Realtors would love to help them out when their inventory exceeded demand. Cheers. P.S. We do everything possible to keep buyers away from them since they can't close a perfect deal even when they have one.

OCT

2008

I faxed a file to B of A on Sept 15th after reading this blog. I was very concerned at first and then happy when a couple of people Joe Lauto and Paul Smart actually phone me back within a day. Since the 22nd of September I haven't been able to speak with either of these people. Joe's number has been disconnected. I can't seem to get Paul's number. I faxed an authorization on the 29th and last week was told they had it but the computer hadn't been updated. They gave me information earlier this week and now they say they don't have the authorization again. In the meantime, during one of my calls, who should I be transferred to but Tony Chestnut, getting the voicemail is full response I had a sinking feeling that this is who whis blog was about. I will try again on Monday, but I'm not holding any hope that this is going to happen.

Don't give up, April, or feel despondent. The squeaky wheel gets the grease in these situations. Also, stay on the line after you get the recording about the full voice mail box, and you will be given another extension. Talk to those people. They make a record of each call you make. The more times you call, the more notes they have to make. Eventually, they get tired of this and try to help you.

I just wonder WHEN the banks are going to start working a bit faster and let go of inventory to buyers who can afford it and still want the property! This would really help to alleviate all the hugh inventories across the country. Move it...

Yes, I call 2 times per week. Some of the people who answer are much more helpful than others. So I just keep plugging along. But time is running out before it goes to Foreclosure.

Thanks

April Ferrao

Hi Amanda: I think we ALL wonder that. I just finished writing my book (The Short Sale) yesterday and sent it off to the publisher. In my preface, I made a strong case for banks to make the process easier for us. Not that they will care, but I said it anyway.

The Short Sale, from Archer Ellison, coming in January.

Hello April: Two times a week?? You have to call three times a day!

NOV

2008

Update to my last post. I took Elizabeth's advice and started calling numerious times a day and even left messages on anyone voicemail I could get. After being told it was being assigned on 9/20/08 by the head of the liqudations department I was told on Oct 14th that it had not been even set up for a short sale yet. It was set up that day and assigned to Russ Carlo.

After 3 calls per day to him I'm still not able to reach him. A customer service rep actually even gave me his e-mail address but he doesn't respond to those either. Everytime I call I get the VM full can't leave a message. After I called Russ and his boss (left message) again on Friday (11/7), I called customer service and told them that the strategy was clear that they just kept their voice mail full and I just didn't know what to do. My issue, I've had three contracts on this property and just sent a new BETTER contract up the end of October and just want to make sure they are actually reviewing the correct contract. He said he would send him a note and claimed to had infact seen him in the office that day. After making the comment on their 'strategy' I called again on Monday 11/10 and got VM again, not expecting to actually be able to leave a message I didn't have the file opened, lo and behold, the voicemail was cleaned out. Hopefully that means he checked his messages and not that he has quit or been fired. I did leave a message, but of course, no response.

This new set of buyers who wrote a much better offer realistically requested to close the end of Jan and I think they could be in a position to put that off until Feb but who know. Just venting really here and giving an update to my situation with BOA. .... the Bank of Opportunity.

NOV

2008

Aaccck, April. You made me push my "page down" button to the limit to get here!!!

They always say they had seen the person in the office that day. Granted, that person might be reassigned to latrine duty, but my god they were there and spotted. Oh, wait, maybe it was somebody who looked just like him! Hard to say among the vast number of employees running for cover in the employee's smoking parking lot.

You might actually have a chance at closing this. But only because you are persistent and you have a buyer who will wait.

I submitted my short sale to Bank of America, it was assigned to Laura who never called me back. Everytime I would call I would ask them to at least review my account to make sure that all necessary paperwork had been received, and no futher action was necessary. Though I had fax them three different times, they would say it was not complete or not there at all.

Finally, I spoke to Michael, who was absolutely fantastic! He took over the file, and fourteen days letter I received an approval. In fourteen days Michael was able to do everything that Laura was not in three months.

The letter however, says that the balance owed will be charged off as collectable and that their recovery department will be in contact with me to make arrangements. Has anyonse seen this before, any experiences? I am set two close two weeks from today, but I'm getting worried that the bank is going to later try to recover the shortage ($192K) which I don't have!

Any thoughts, ideas?

You made me do it. You made me hold down that key for page down for 30 seconds.

Hard to say Val. In California, we have a complex set of rules, which vary from state to state. Depends if your state invokes personal liability for the loans. In CA, if it's purchase money, it's not subject to collection. However, if the first loan is hard money, the only way a lender can pursue a deficiency judgment is through a judicial foreclosure and not a trustee's foreclosure. Most file trustee's. So, exempt. The trick is if there is a second, and it's hard money -- if that hard-money second gets wiped out through a trustee's sale, that second lender can come back on the owner, providing it's hard money. I know, confusing. You should check with a lawyer to determine your rights in your state.

NOV

2008

Elizabeth,

Yes, very confusing. I have a first and a second, both with Bank of America; loan total for both is about $585K. The home appraised for $5K less than the contract price, so the bank most likely won't get more for it if I foreclose. However, I am hesitant to sign anything that indicates agreement to them comming back for the remainding balance of the loan, which is roughly $192,000.

Sunny Florida; the land of short sales, or not!

Hi,

Can I sue a bank for not completing a shortsale in a timely manner?

Thanks.

Val: Your short sale may still be doable. BofA looks for a 95 to 90% LTV, so even with $5K under appraisal, it may still be doable. Don't give up hope. You've come this far!!

Hello Wanda: No, you can't because it's voluntary. But then again, you can always find a hungry lawyer somewhere . . . See, that's the thing people, there is no federal law requiring lenders to do a short sale. None. Nada. If the bank says no, it's no. It's the bank's right. No requirement to cooperate with the HOPE for Homeowners', no requirement to do loan modifications, absolutely none. Nor, some would argue, should there be. This is a free enterprise. We live in a capitalistic society. The government can't dictate what business should do because, hey. What would that be called? Oh, I forget, the Bush administration.

I do know of people who have sued because the lender approved a short sale and then changed its mind.

NOV

2008

Hi Elizabeth,

Just came across this. Wao! - I read all the posting from first one back in March to yesterdays! I've been invoved in distressed sales in AZ fo about 7 yrs. - Ive seen alot! The Phoenix area (along with NV and Florida) was one of the Hotspots on the way up, it is still on the way down. I've been inactive on realestate for the past 1 1/2 yrs (other bussiness kept me busy), now I need ($$$) to get back into it. Plan to wrok the short sales angle (like many others) - If you had to give an estimate, how long do you think it is taking on average to get written approval from the bank? I also heard the banks are not discounting more than 20-25% of original loan amount. In this area that is not even close. Large numebr of homes have lost at least 50% of the original sale price, and many where financed with the now infamous 80-20 loans - many of them sub-prime. I was under the impresion Backs would agree to discounting arround 15% from todays value

Guillermo

On average for short sale approval? I'd say two to three months. If a buyer has walked away at short sale approval, you could slip a new buyer in and get approval in 2 weeks. Other short sales can take 9 months to a year.

Banks are discounting to the comparable sales. In some areas, it's 50%. I've sold quite a few around 50% of what they originally for. B of A told me it doesn't want to go below 90 or 95% of value. It all depends on the bank and that particular bank's requirements.

Hi Elizabeth

Thaks for the quick response! Maybe you should teach the bancks! :-)

In my operation, buyer will not walk away - I'm the buyer. Average 3 month is fine, 1year maybe not. Guiven the state of things, it would be next to imposible to predict the FMV of a house 1 yr from now.

NOV

2008

Oh my gosh! I don't know what to do! Everything is ready to close on the 26th; but why would BofA wnat to accept a short sale and then try to collect the differnce from me?

I owe $585 the house is selling for 429 but after all the seller costs, only 389 is going towards the note. Bank of America will try to collect on the rest later? I don't want to deal with it later, I don't have the money to pay it back, hence the short sale.

Is a foreclosure a better option? The house won't appraise for more than the buyer is paying for it. It actually appraised for 5K more!

Has anyone dealt with this situation?

I appreciate all your help!

-Val

Val, you need to talk to a lawyer. Generally speaking, a foreclosure isn't going to wipe out the right to a deficiency judgment any more than a short sale, but you need legal advice. In other words, if a lender plans to pursue you in a short sale, it will do so in a foreclosure as well. You should talk with a lawyer who is versed in real estate law in your state.

DEC

2008

Just let it go to Foreclosure. There is no difference in credit scoring between a Short Sale and Foreclosure and the bank seems to be keeping you on the hook for the balance remaining.

Here is my advice, do not close on the short sale. IF, they decide to serve you a Foreclosure Summons then you can prepare a written Answer and claim that they did not properly conduct a loan workout agreement. Chances are that down the road Bankrputcy Judges will be able to write down the principals of these mortgages, the Administration is currently kicking around the idea of a 31-29% of your monthly income payment restructuring.

If you want to stay in the home...you can...Consulte and Attorney.

JAN

2009

Elizabeth, I truly don't think the banks do care whether the house goes to foreclosure or not. In truth, I think it is easier for them to let it happen because if it goes to auction, someone might buy it, and if they don't, well then they have more time to work out the details on the REO Sale. Every consumer I have talked to who was having difficulty making their payments have run up against the same stumbling block you referred to. They can't get to a human to talk and if they do, the person never returns their phone calls. BOA is only one of many and the people trying to work things out with them get nowhere. It is sad but I really think the banks would rather get the property back than work out the details on a short sale. Different department entirely and one dedicated to just REO properties. Those poor people in the Short Sale areas are probably temps or part-timers or low paid people they hired just to shuffle paper. They have no authority to make decisions and are probably four or five levels below the actual decision makers. The decison makers are too busy taking cruises or vacationing in multi million dollar estates on the beach somewhere to be bothered.

Update to my BOA short sale. So you don't have to review all my posts on this subject. Sent the original file 9/15/08. Spoke to human beings in apparent power the first week and then they disappeared. Three contracts later and a month later the file was assigned on 10/14/08 to Russ Carlo. At one point I was successful in leaving him a voicemail. I thought that meant he had checked his messages. However, upon calling back later I was told they have disabled voice mail because the negotitors don't have time to check it. That if they have an update or need additional information they will contact me. Mid-December my seller got an automated call from BOA stating that they had his file and he would receive an update within 2 weeks (Dec 23rd). Today Jan 5th, no update to the seller. I've called and called and called. One rep even stated they will tell you anything to get you off the phone, she went on to state she was going to 'thump' Russ on the head for an update, when she returned she state, "You're going to love this, He said, I have 55 calls in my queue what do you want me to do" "Tell her I'll try to call her back", then the rep said. I've sent him a message and one to his manager, now wish me luck I'm off to an interview. I about laughed my head off.

Anyway, calling and calling, I'm told I have to call the 800# to get updates. So great I do. Then I get AJ who tells me there is an update on the file but Russ has to give me the update. That was 3 weeks ago. Today called again, got no where. Hit redial on his number so many times I think the number is ingrained in redial. But alas always a busy signal.

We are suppose to close Jan 30th. It's nearly 4 months since they've had the file and it doesn' appear they've done anything on it. I'm thinking that if we lose this deal it might just be in the seller's best interest to give it back to the bank. If he does a deed in lieu I don't believe they can come after him for the loss they incur when they sell it. (which they will). But if he lets it go to forclosure they could try to come after him anyway. I've been working on this house since July 2007 and while I know I'll lose the earnings on this I'm just not so sure that this is all in the best interest of my seller and the buyer.

Anyone else have any helpful hints on getting to a actual body with knowledge at BOA? With the exception of course of boarding a plane and flying to NY.

Thanks for listening to me rant and Elizabeth thanks for starting this post.

I think this is where Tony Soprano would come in handy. JUST KIDDING. Actually, I was just lucky and happened to call and be persistent at the right times. That was, I dunno, a year ago. I'm sure B of A is even more overwhelmed today.

Truly, if I was in your shoes, I would do my best to manage the situation on your end, and manage the buyers' and sellers' expectations. I do believe you will get a response, and trust me, the squeaky wheel gets the grease, but apart from calling 3 times a day, there isn't much else you can do. Getting on a plane will only jam your knees up to your chin as you're cramped in economy seating and wondering why in the world you ever decided to fly and make your life an even worse living hell.

I do have a book coming this month, at least it's supposed to come out this month, called The Short Sale Savior, published by Archer Ellison. Believe me, I have spared no details about how the banks have been responding . . .

Elizabeth,

Congrats on the book. I'm sure you will let us know when it comes out. I know I'd like to check it out. I've been trying to set the expections for the buyers and the sellers. The seller isn't too worried actually. For him if it happens it does if it doesn't the bank will have a nice house all their own. I'm more worried about the buyers. They aren't my buyers (long long story, they used to be, wanted seperate representation), but I care for them a lot and this was the PERFECT home for them of all the ones I showed them. We set the expection with them back in October that it would be likely around 3 months before anything would happen. However, as the day gets closer and closer I become more concerned that if we don't get somewhere soon they will pull and find another place to live.

They are currently renting month to month, but their landlord/builder wants to put the house they are in on the market this spring. They won't buy it because there are changes needed to the house that the could not do to make it theirs. So if we don't get somewhere soon, I'm afraid they will start looking elsewhere.

I'll keep trying and trying. I'm not flying to NY. Although it would be a good excuse for a family trip to see my brother-in law I have not desire to go to the Big Apple. Thanks for the response and let us know about the book when it comes out.

Thanks

JAN

2009

Hi April:

That's always the question looming on the horizon -- that after you go through hell and back to get the short sale approved, will the buyer still be there. Nowadays, I take multiple offers on every short sale listing to up the odds that a buyer will be left standing when the smoke clears.

Good luck with this. Oh, and I hope my book comes out by the end of the month -- haven't heard a publishing date yet, January was just the target.

Another update from today. I called again today and got a wonderful person who actually wanted to take the time to look at the updates. When she did so she said., Oh I see the problem, it's assigned to Russ in NY. I said yes I know. She said, well it should be assigned to our office here in CA because it is a Fannie Mae loan. I said, yes I know and Russ is a Freddie Mac guy. She was surprised I knew this and equally surprised when I explained to her that I learned this news around Thanksgiving. I had questioned several reps regarding this and also send Russ an e-mail on Dec 1st expressing my concern that since he was a "Freddie Mac" guy was this going to need to be reassigned thus delaying this even further.

I saw all the warning signs and red flags there just wasn't a rep that I got on the phone that cared enough to actually do anything until today. Julie has reassigned the file to a CA analyst and says that I will hear something in 7-10 business days. Anyone have any luck with the CA office as opposed to the NY office. I'm hoping that on a seperate coast there may be a different set of work ethic or values that will help this along.

Anyway, keep your fingers we can get some sort of response from a human in the next couple of weeks. I think if we get anything at all we can keep the buyers otherwise I think they may be out the door.

JAN

2009

I did a short sale witha 650k balance that I understood from my agent the bank will write off if they accept the offer..The deal got done back in sept 08 and i thought i only had to deal with IRS by way of 1099 but it would be forgiven by new bush act. But last week I get a call fro BOA asking ow I want to repay the reamining balance.. I let them know I had no idea what they are talking about and I would never had done a short sale if I agreed to pay back.. They said they sent my agent the terms of the acceptance and It clearly stated it would be collectable balance.. I went through my paperwork never found document but my agent said she had it.. it was signed by me and opps she must have missed that part... Not even a sorry.. But don't worry they're just fishing. She never expalined the approval conditions nor did she understand them.. Wouldn't you think I have a case for malpractice.. I hired the agent based off she explanied she's done these before.. I should short it because the banks end it there no leaving it out there in no mans land like a forclosure would. Help if you can..

Hello J: I'm not a lawyer, don't play a lawyer on TV and can't give you legal advice, but this sentence caught my attention: I went through my paperwork never found document but my agent said she had it.. it was signed by me and opps she must have missed that part -- if I'm reading it correctly, it indicates that you signed the short sale approval letter. A judge might question this and ask why you didn't say something at the time.

Moreover, it is likely that when you look through your paperwork, you may find documents advising you to seek legal and tax advice before consummating a short sale. A judge might ask why you didn't heed that advice.

Laws regarding deficiency judgments are different, depending on where you live. You might want to ask a consumer attorney to help you sort this out with B of A. I've heard of cases where the bank, not necessarily B of A, has attempted to collect debt when it had no right to do so.

You might ask your agent to give you a copy of that short sale approval letter or get a copy from your closer. I don't understand why your agent is not being more cooperative at this point. Just because a deal closed doesn't mean the agent should be nonresponsive.

Thanks for the quick response.

My agent did provide me with the letter last week. But I feel that the agent is the professional in this matter andnever explained the document she had me sign. She ran into my work said great news they agreed to the shortsale and I must sign if want to close next week. this is the most important document in the whole file. it all comes down to the approval letter listing the conditions.. Wouldn't you think if it was one of your agents she must know what shes presenting.. And if I new there was a chance of having pay it back I would'nt have done such an extreme short sale.. Maybe a $200k but not a 650k difference.. I feel the profesional in the matter should have explained the process a little bit better.. do you think this would fall in Errors and admitions.. I know your position is not a lawyer just want to know as an agent if you think there duties you should live up to

Hello again, J:

Imagine you are sitting in a courtroom and a judge says, "You just told me the short sale approval letter is the most important document in your file. Are you in the habit of signing and agreeing to documents that you do not understand?"

How would you respond to that question? A judge might not feel any empathy because the agent delivered the document to you, and you most likely signed other documents containing verbiage that advised you to seek legal advice, explaining that your agent cannot give you legal advice. Agents are not supposed to interpret legal documents, and I can't imagine that failure to explain the consequences of a legal document fall under an agent's Errors and Omissions insurance.

I'm not taking the agent's side in this, either, but instead trying to explain another way to view this. Since I am not a lawyer and cannot give legal advice, you should ask this question of a lawyer. There are a lot of other considerations that may work in your favor, which only a person who has reviewed the file in its entirety and is licensed to practice law can answer.

I just finished reading your original post and I have gone through the same thing with Wells Fargo and am currently going through the same thing with Countrywide. Incredibly frustrating and there doesn't seem to be anything we can do about it. It is no wonder why most Realtors avoid short sales. (my humble opinion)

Hi Greg: Well, I wrote that post almost a year ago, and looking back, I can say it's getting much better, actually. Not at all where it really should be, but it's a bit more palatable now. I'm getting my short sales approved now within 6 to 8 weeks instead of 6 to 8 months.

Good article! My opinion is that Bank of America has never cared. They have always looked ignored everyone including politicians.

This is what led to their downfall. Now they are knocking on Washington's door but no ones answering. It's also why their stock now pays a dividend of one cent!

Hi Elizabeth,

Your response is encouraging. However, (but, but, but) I haven't experienced that yet. Perhaps it's because I am representing the buyers (mostly) and don't have access to loss mitigation personally. It still seems to me that the various lenders are not yet overly anxious to negotiate a short sale. I'm glad you feel it is changing because it sure needs to.

Thanks for your encouragement.

Greg

JAN

2009

11th hour seems to be the only time short sales will close. I had one home minutes away from being foreclosed on when we finally got the agreement of the 2nd. Very stressful but happy my clients got their home.

JAN

2009

A small success. I've been reporting here on my experience with BOA. I have the listing. After 4 months with the BOA having the loan, 1 month of which on constantly told them they had it assigned to a "Freddie Mac" negotiator in NY perhaps it should be reassigned or was this going to cause a delay. Someone finally reassigned it to a "Fannie Mae" negotiator in CA.

In CA they have working phone and actual e-mail. I was once told by BOA they had no secure e-mail so we could not communicate by e-mail. Within 2 weeks it was assigned to the lady in CA, I got her direct phone number and e-mail. I e-mailed her never actually expecting to get a response and before I could complete the next e-mail I was composing she e-mailed me AND CALLED me. I was so overjoyed with excitement at the actual existence of a human at BOA I about fell out of my chair. This was last Friday. She was able to give me a time line of each item that would happen, the appraisal has been order and already happened, next on to the MI company for approval and the buyers are willing to stick around past this Fridays original closing date and have extended the contract to March.

Elizabeth I think was right, I finally see light at the end of the tunnel and it looks as if this finally will happen.

Hi Paul: Griping about large corporate banks only makes us feel better. It doesn't change anything.

Hi Greg: I am seeing more cooperation, much more than a year ago when I wrote this blog.

Hi Jessica: Short sales are stressful for everybody these days. Well, except maybe the listing agent who has a ton of offers. :) I swear, it's a lot easier being on the listing end of short sales right now than the buyer's end.

Hi April: Hey, I am so happy for you!!! Thanks for providing an update. Good going! See, hanging in there pays off. I find you've got to go to bed at night thinking, tomorrow, tomorrow I will get an answer. Because eventually you will. If you pull the covers over your head and say #%%#* that Bank of America, you'll just toss and turn on all night. Ask me how I know that. :)

I now employ a real estate agent in my office to hammer on the banks. She's a law school graduate, too. I get to do the fun, HAPPY stuff, and she deals with the mental anguish. We make a good team. It's one way I have increased my production of listing short sales without sacrificing service -- in fact, it's an enhancement. And I'm closing all my short sales in Sacramento.

JAN

2009

Hi Elizabeth,

I'm excited for you! Truly! Unfortunately, I'm still having nightmares with short sales. My latest involves Well Fargo. (2 loans both with WF) I'm representing the seller. Listed the property on 11/12/08 and received approval from the 1st on 12/8/08. So far so good! My last contact with the 2nd was 12/9/08. I have called and left messages, emailed, and had the 1st call and ask for help on two occasisons, once directly to a supervisor and still nothing. I have advised them that we are still in a declining market and that I am concerned we will lose the buyer but still no response. I know the banks are very busy but I cannot understand why they can't find time for a brief phone call or an email. I've had similiar problems with WF in the past. This is why I have a problem getting excited about working short sales.

FEB

2009

I'm involved in a short sale right with Bank of America right now and just received the approval. The loss mitigation negotiator in CA was a pleasure to work with and actually called us to update us on the status of the short sale. Far different from the last short sale listing I had where my messages went into voice mail hell. Anyway, the approval letter finally arrived and stated that they would charge off the difference but that their Loss Resolution Dept. would contact the seller to collect the balance. I'm curious to know if they really go after the borrower for the difference or is this standard language used to scare the seller. The attorney made it clear to her that the seller was financially unable to commit to repaying the balance but loss mitigation said that this was not their area and that once the short sales are approved they go right over to Loss Recovery. We;re now keeping our fingers crossed that the deal doen't fall apart at the eleventh hour.

FEB

2009

GOOD NEW ON MY SHORT SALE JOURNEY. We got approved. I agree with Alice Ng above. The loss mitigator (Lilian) in CA was an ABSOLUTE PLEASURE TO WORK WITH. Everything in NY goes to voicemail hell, no returned calls, and the run around. Luckily (or not so), our file was misassigned to a guy in NY (Russ) who never returned a call, e-mail, etc. When they finally got it together and assigned it to the correct person in CA it took about 1 month to get it approved.

So I guess it really does take 30-90 days if they assign it correctly to start with. We had a Fannie Mae loan that was assigned to a Freddie Mac guy in NY. I was told that the Freddie Mac guys are in NY and that Fannie Mae loans need to be assigned to CA. What a relief.

Thanks for all the support Elizabeth provided to me during this time. There is hope out there.

FEB

2009

I hope to get some advise of what to do next on my offer. I submit and offer to a short sale about about 5 weeks ago. I'm buying this house for myself. The listing agent is not answering my call or replying to my email. There ia an IRS lien on the property. Last week I finally talk to the listing agent and was told that my offer is a back up offer and were not submit to the lender. The lender is BofA. I really like this house and wants to know what our my chance of getting this house or I should just move on. I read a couple of website that suggest that I can submit an offer directly to the lender as a buyer. Is there another way to go about this ? I hate to go direct and cut off the listing agent deal, but this is my dream house. How can I get my house and not over the listing agent ?

Thanks in advance for all the advise...

MAR

2009

This is mostly not very good news. My husband and I just found a house we LOVE and it's a short sale financed with Bank of America. We're first time home buyers and thought we could use this marked to our advantage but it seems to be our chances of getting the house are almost zero. The house is listed for 295k and Bank of America had an offer for 260k and did NOT approve it. I was so shocked to hear that because it doesn't make sense to me that they would rather sit on it longer than loosing 35k!! The potential buyer dropped out after that because they got tired of the short sale / waiting game and the house doesn't have any offers on it at this point. My husband and I would like to offer 230k but I think it might be just a waist of time since they refused to accept 260k about 2 months ago. Has anybody ever seen them change their mind and all of a sudden accept a lower offer? Or does anybody know if there is a "nice" BofA mitigator working on short sales in the Chicago area?

The entire key to making an offer on a short sale is to offer within the range of comparable sales. This means offering a price in line with recently sold homes. Many banks will accept an offer that is within the realm of 5% to 12% less than market value. List price means very little. If the agent listed this home at $295,000, hopefully that agent based the price on the low end of the comps.

The bad news is you can offer much less but the bank is not likely to take it. That's because the bank can foreclose, put it back on the market and get a better price. Banks are not dumping inventory at ridiculous prices unless those homes are bundled in a bulk sale.

You should examine the comps and write an offer based on tangible numbers, not figures plucked from thin air. Because the bank will be looking at those numbers. Now, if the market has dropped, then yes, it is possible the bank will accept less, but please look at the comps and write a strategic offer. Be ready to validate your offer and explain how you arrived at the price you are offering. Banks don't care if you can't afford to pay more. They will say if you can't afford to pay a reasonable price, then you should be looking at reasonably priced homes that you can afford and take your sights off this home. That's the hard, cold real world of short sales and foreclosures.

APR

2009

Bank of America is a Big Joke!! It took them 6 months to approve one of my short sales. The buyer is paying 2k under what the BPO came back as with no seller paid closing costs. Pretty good deal for BofA if you ask me. The buyer's lender needed 3 extra days to get his financing in place and closed. I have been trying to get Bank of America to give us the extension for 1 week now. Now the short sale letter is no good because we didn't close on the 26^th and we are still waiting for the extension. They keep telling us that it's with Fannie Mae and there is nothing they can do. It takes Fannie Mae one week to approve a 3 day extension???? WOW Also the contact phone number I have for my bank agent tells me that it's a non working number and when I press zero it sends me to a call center that has NO idea what is going on. We will email your Bank agent and have them call you back. Story of my life!! The call center last week told me the short sale was closed out because they didn't have the listing agreement!!! Well if that the case how did I get this approval letter telling me that I have to close by the 26th of March??? Then she calls a manager and the manager tells her that they are still waiting for the extension and the short sale is not closed out!! Come one people can we all get on the same page here??? Someone really needs to do a news article or something on Bank of America and how much of a JOKE they are when it comes to Short Sales. Now I have a Seller that is all moved out and a buyer seating in Limbo because Bank of America is waiting for Fannie Mae to approve the Extension. Again how long should it take to approve an already approved short sale for a 3 day extension? A month or so would be my best guess!!

APR

2009

My son defaulted on a note with BofA which I cosigned. I offered the bank more than the fair market value which at this time would be 50K to 70K more than what a foreclosure would bring. They indicated they would not accept an arms length transactiion. No wonder the bank is going bust. The gov't should let it die and take down with it all the financial jerks that run the finance dept. Now I have destroyed my credit tnx to this bank The home stands empty as my son has left the state. The last two letters from the bank were the usual threats and one that stated they could not find a solution. The solution is obviious, let me buy it for more than it is worth?

Jerry

APR

2009

To help of us realtors in short sale business, I have created a link

http://360realty.com/360blog/2009/04/21/short-sale-package

to find short sale packages for different lenders. If you guys have short sale package for lenders that are not on the list, please email to me and I will add it. I believe that in this time it is important for us to put all of our information together.

I will follow up with links of names and phone numbers of negotiators for all the banks. Hope this helps.

APR

2009

Bank of America is the worst of the worst. They are criminals and should be prosecuted!!! They make money hand over fist, take TARP money and then treat customers trying to stay afloat like scum of the earth. I'm a Realtor in AZ and have a client who wrote them in OCT 2008 to start the process to do something to save her home. They've lied to her, never followed through, lost her paperwork, etc. etc. during these 7 months. She then wrote them a very firm letter that went unresponded to. She called just LAST WEEK and demanded to speak to someone with decision making authority. She got some overzealous, power-hungry mongrel who began to scrutinizeevery aspect of the expense sheet she submitted, specifically her health insurance premium and her monthly grocery expenses. FOR GOODNESS SAKE, who do these people think they are. Do they need the woman's medical records in order to substantiate her health costs? Like no one knows our insurance system in ths country isn't in a state of disarray. And to question someone's grocery monthly bill? God forbid she wants to put food on the table while she watches her house crumble to the financial crisis. To top it off, when my client said to the supervisor that they've left her in peril with no options and that her credit is about to deteriorate the supervisor stated "WE DONT CARE ABOUT YOUR CREDIT, WE CARE ABOUT OUR MONEY!! Disgusting and repulsive. I have no empathy for these workers, THEY HAVE JOBS AND SHOULD BE GRATEFUL THAT THEY CAN KEEP THEIR OWN HOMES BECAUSE THEY HAVE JOBS. Why are these banks getting TARP money and other funds from the taxpayer? Why aren't they required to staff up to open up the pipeline and ease the burden on their workers and REALLY help people to stay in their homes? I'm disgusted and wish somone with some pull could report these people to the White House for reprimand. Elizabeth, is there anything you can do to continue to make a difference for those of us who are ignored and not listened to, and treated like maggots? PLEASE HELP!!!!

Chris: I'm sorry you had to endure such an ordeal. Not every bank employee is efficient and polite these days. I do know that Bank of America, when in second position, is now demanding 5% of the first lender's net and often will insist on an unsecured prom note from the seller as well. It's not just Bank of America that makes the lives of those involved in a short sale miserable but other banks are adding their fair share of heartache to the process as well. I do talk about that in my book that's coming out next month.

Thank you for keeping this issue at the forefront of your voice to the public. It is distressing to watch my clients endure this horrific situation. I'm one of those Realtors that got into the business to help people, not watch them be treated so poorly, especially at a time when they are so vulnerable. I appreciate this platform to share our experiences and hopefully gain some insight on how I can actually help my clients. Please keep up the very good work you are doing. Maybe you can keep getting the word out through your pieces with the Times and other news outlets. It's puzzling that these financial institutions are getting taxpayer money to help the public, and instead are hurting so many.

MAY

2009

As a potential CASH homebuyer here is my beef with SOME agents representing REO homes:

They become speculaTORS and not realTORS. My wife and I are interested in buying a home owned by Bank of America and represented by a Foreclosure "SPECIALIST" in the Fresno, Ca area. Over the past two months we have tried to purchase this home for CASH and nothing seems to get past the realtor. We don't hear from the title company, nor the bank. The agent seems to be putting us off yet we are willing to offer cash for the home. For months the home had no sign in front of it yet it was for sale. Then we made an offer yet we were told that it was in Escrow, we found the people that were the buyers and the deal fell through...They walked away because they could not get financing. We immediately called the agent and he stated it was "unavailable". We are not trying to LOW ball an offer...We are coming in within percentage points of the asking price, we have no agent, we don't have to sell a home, and we HAVE CASH. What is going on? Is there someone at BOFA I can get in touch with? It is weird and frustrating. Thanks for any advice.

MAY

2009

Hi JS:

I'm sorry to hear you are having such a rough time trying to buy this bank-owned home. I'm betting that in the beginning it was not actually for sale. Just because a home has been foreclosed upon doesn't mean it's for sale yet. But the agent is responsible for presenting all offers to the bank unless the bank has told the agent not to send anymore offers.

If I were you, I'd hire my own agent to present my offer to the listing agent. It's not going to cost you anything, and a real estate agent has more pull with the listing agent than a prospective buyer.

MAY

2009

5/04/09 I just spent 90 days attempting to purchase a BoA short sale in IL/one mortgage. I wrote an offer of 112000.00 on a property that was built and sold for 184000.00 in 2007. There are at least 4 other similar properties on the same two blocks listed in the same price range, either short sales or bank-owned. I was through underwriting and approved by my lender before I bid. I increased my offer to 113000.00 on BoAs request and offered to pay 3000.00+ in back association fees in cash. All was good, all approved verbally and one written approval came in. PMI requested the seller sign an unsecured note for an amount of the shortfall. Seller agreed verbally to the note. Note papers came in to be signed, PMI increased the amount of their portion of the note on the paperwork without notice and BoA added in their request for shortfall payback also. Negotiations were difficult with a language barrier, from what I was told. Negotiations broke down, as of course this seller would be up to date with mortgage payments if there was any money to do that. The seller has nothing, or this property would not be in pre-foreclosure. I gave BoA 24 hours to accept my offer and figure out what they needed to do after one last 2 week extension on the contract expired. Needless to say, the seller also canceled the contract on the same day, property is off the market. Now BoA will have to wait until a future foreclosure date, as of today the property is not listed on the auction list through July 09. Nice. I did not submit an unreasonable bid with what is selling in the neighborhood. BoA is asking bankrupt people for funds they don't have. BoA disrespects our tax funding. BoA disrespects my solid offer, I am the one with the money, I am the one with the approved loan and I am the one that was willing to buy a property that could very easily continue to fall in price. BoA will get much less at auction. The seller will continue to live in the property as long as possible without making payments. Late association fees will continue to increase. BoA will have to cover those association fees at foreclosure, I would have paid them. BoA disrespects my offer and my ability to buy a property at this time. BoA expects notes to be signed by sellers for shortfalls that are covered by PMI, and by sellers that don't have the ability to pay back a note such as this at this time. Why would the seller sign? Obviously their credit rating is already ruined. Nice, BoA, nice.

I have bid on another property, there are non BoA properties selling in the area, many, many short sales on the books. I bid on a bank-owned property, as I should have the first time.

MAY

2009

I am sorry that Bank of America managed to mess up that short sale for you. Foreclosure homes have their own set of problems, too. But, maybe if you don't buy a home between now and July, you can submit a new offer when this home comes back on the market as a bank-owned home. I would wager to bet the foreclosure price will be far less.

The offer I wrote on Friday on a bank-owned property on the same block/similar home was accepted today, 4 days after the offer was submitted. No short sale details to wade through, quick closing. I'm not saying that short sales aren't happening, I AM saying that Bank of America is not being honest with it's last press release of April 24th, saying that it will work more swiftly and successfully on their short sales. I am saying that Bank of America does not respect an equitable market driven offer on a home that is going to foreclose, losing more money than if the original offer was accepted. I AM saying that Bank of America is using our TARP funds while making decisions on short sale offers that prevents the property from closing, losing more money on defunct mortgages going to foreclosure. All while the news today is that Bank of America needs 45 billion more of our money to stay in business.

MAY

2009

freenancee, Can you post a link to this press release on April 24th please? I am interested to see this.

Also, does anyone have any contact info for someone in upper management in the Loss Mitigation department for Bank of America?

My current negotiator won't even give me their manager's contact info. Some of the biggest problems I am having with Bank of America on this short sale is when they went through my HUD, they started to tear apart the entire thing. Some of the items they are "choosing" not to pay for is just ridiculous! They say they will not pay for anything that has to do with an HOA, not even if there is an HOA lien. Nevada is a superlien state and most lenders know this. That means they must be paid prior to selling the property, even if the property forecloses. Another item on the HUD of course is the commission where they say they will only pay up to 5% max! Again, ridiculous. They also stated to me that they will charge off the entire deficiency as recoverable debt. Another term of theirs that is unacceptable.

I am a Certified Short Sale Proessional (CSP) and I typically get these done very successfully. Anyone have any tips for working with BofA?

Thanks in advance!

Len,

My first question to you would be is this a Freddie Mac or Fannie Mae loan? I found when dealing with my foreclosure with BofA that the Freddie Mac people in NY are impossible to deal with. Luckily, turns out, they had assigned mine to the wrong person since it was a Fannie Mae loan.

I closed a deal in March -- Yes they do not allow HOA related charges to be paid. My people had not paid their dues for 2 years. I paid it myself to get the deal done.

Commissions -- I knew going in that they only allowed 5%, this is not unusually for a bank to require a reduced commission. However, again if it is Fannie Mae you may be in luck. My understanding is that effective March 1st, 2009 they will pay the 6% commission, but nothing more. You can check out this link for that information: https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2009/0903.pdf

However, Freddie Mac does not have this policy so they may require the 5% commission.

Also, yes they did charge of the entire deficiency as a recoverable debt and my seller had to sign a letter sent to him acknowledging such prior to the closing.

Any tips for working with BofA -- Pray your sellers loan is Fannie Mae and you have a negotiator in CA. If you wish to send me, (privately) your contact information I might be able to send it along to the negotiator who was WONDERFUL that I worked with.

But everything you have stated is exactly how my deal went.

Good Luck -- April Ferrao

MAY

2009

I put in an offer 75 days ago on a home in MI and BoA just told me today it's going to be another 30 to 45 days. I am so frustrated. BoA has said that my offer is very strong, so I'm not sure what the delay is. They claim to have received all of the necessary paperwork from the owner/seller.

MAY

2009

Hi,

I have been renting a house in San Jose, Ca since early 2007. My lease expired over a year ago and now it is month to month. I just found out from the owner that they are upside down on the house and that they are in the process of putting it up for short sale soon. Based on what they told me, I estimate that they owe about $200k over the house's current market value. The owner told me the lender is BoA. I like the house and the location and wouldn't mind buying it at or slightly below its current fair market value. Is there anything I can do that would allow me to purchase the house before it goes through the lengthy and somewhat convoluted short sale process? Does my being a tenant give me an advantage or is it a disadvantage? Thanks!

If you want to purchase this home with a lower mortgage, you have no choice but to go through the short sale process. Otherwise, you'd be taking title subject to the existing loan, which is much higher than the home is worth.

In the past, banks frowned on tenants buying their own short sale -- it wasn't exactly an arm's length transaction -- but today they aren't as fussy about it. Haven't tried a tenant-occupied short sale with Bank of America, though.

The seller could hire a lawyer or a real estate agent to draw up a purchase contract for you; why not give it a shot? You're going to be there anyway. Plus, if your offer is submitted to the bank, maybe the seller won't put it on the market or offer it to other buyers.

MAY

2009

Len--link to the April 24th BoA press release, for kicks and grins:

http://www.homes101.net/news/n4531

Angela: I think you may find that the BoA time issue is not that they are supplied with all of the paperwork needed, but that they are going back to the seller and seeing what they can get them to agree to repay on the shortfall, stuck in loss mitigation. Short sales are going through in my area, but with BoA? Not so much. My attorney told me she feels that BoA just really doesn't want the losses on their books right now, as they are being reviewed for bank viability? I don't know, it does seem that they don't care. I have also heard that in my area the first offer on a short sale property "tests the water" and the bank may not get serious about considering an offer until they see that the first buyer with an offer close to being accepted walks because they see that it just isn't going to happen.

My big question is, why don't they want my money? A valid bid from a buyer with lending approved and through underwriting already. BoA would prefer to let the defaulting seller live in the property free for how many more months? BoA would prefer that HOA fees rack up a higher lien? I stated that I would pay the 3,000.00 in cash prior to closing, but they prefer to be required to pay that themselves at foreclosure? BoA would prefer to see this property not sell at auction, and then sit for months longer and sell at how much less than my original offer? I have the funds. I have the ability to purchase. I have the resources to stop the bleeding. BoA doesn't care? Doesn't want to stop the bleeding? It certainly is not rocket science, and it makes sense that the appearance could be that BoA does not want anyone to know what kind of losses are waiting to be listed on their bottom line.

Anyway, I have a signed contract on the bank owned property I wrote on two weeks ago in the same neighborhood. Similar property, same offer. We are scheduling the closing date today.

MAY

2009

We made a cash offer on a short sale property in Michigan in mid-January 2009 (offer is approximately 62% of loan balance). Lender was Citibank. We just learned this weekend that they sold the mortgage to Bank of America... We were hopeful that BofA was more inclined to move faster on such transactions, but from reading all the posts, that doesn't appear to be so.

My question... Will we be starting from square one now that we are dealing with BofA? All paperwork for the seller was submitted to Citibank. We've provided confirmation of funds. Citibank conducted appraisal. Seems that Citibank has all the pieces they needed to make a decision. Will that follow the loan to BofA?

This has been a VERY frustrating process. (The word "outrageous" comes to mind!)... but we've been in it this long and do not want to walk away now because we would really like to get this home.

I don't know, with how BoA worked with us that they could keep track of paperwork going from one bank to another if a mortgage was sold during a short sale offer. Why would Citibank attempt to sell mortgages like this and why would BoA take them on, if they can't handle what they have?

Anyway, the only advice I would have, after going 90 days to an unsuccessful end with BoA is to not be emotionally invested or in a time crunch with the purchase. If you get it, great, but I would be more inclined to believe not.

Another property in my neighborhood similar to mine is back on the market this week. The second offer the seller has brought to BoA on a short sale and after months the second time is "relisted". How long will this bank hold a property before foreclosing? The relisted property is vacant.

Better news--the bank-owned property I bid on is all signed on the dotted lines. Inspection and appraisal tomorrow. The property is very new, should be no problems.

MAY

2009

Good Luck with that. I have been waiting for ONE YEAR!!!! For Countrywide now Bank of America to complete my short sale and today found out that because I claimed Bankruptcy last month my transaction is on hold for another 2-3 months. I call weekly for updates and each week it's the same thing a new negotiator is assigned who never calls me back so "managers" escalate my file to order the BPO...the same one that was allegedly ordered on 12/20/2008! I can't believe it I thought these were fake names that they used I've left messages for Keith as well. I'm so distraught. When I orginally called them for help because my commissions were few and far between they told me to get another job because it wasn't their fault. One year later I told them that I'm so upset to be potentially losing my buyer and only shot at a short sale which will cause it to go into foreclosure and sherrif sale...I said that this will make my credit even worse that I will have to wait 7 years to buy again vs. the 2 years for doing a short sale the customer service representative said "what did you think was going to happen to your credit when you filed Bankruptcy it's not our fault that it's wrecked"!!! I couldn't believe my ears. I'm an honest person who is a victim of the economy I was proactive about making things right finding someone to lease the place and then buyers and what do they do....lose my paperwork 3 times and completely blow me off!!! This is hands down the most unprofessional abomination of a company that I have ever dealt with!

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Elizabeth Weintraub, Sacramento Short Sale Agent, Land Park, #00697006 Lyon RE

Sacramento, CA

More about me…

Lyon Real Estate #00697006

Address: 2801 J Street, Sacramento, CA, 95816

Office Phone: (916) 233-6759

Cell Phone: (916) 233-6759

Email Me

Broker-Associate at Lyon Real Estate, midtown Sacramento. Selling since 1974. Home Buying Columnist at About.com. Sacramento short sale agent.

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