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A SUCCESSFUL SHORT SALE WITH HOMEQ SERVICING

I have had a great experience with HomEQ during my negotiations of a short sale request. My phone calls were answered immediately, their files were up to date with all the paperwork I had faxed to them, the negotiators were courteous and helpful on the phone. They understood that the subject is located in a very active foreclosure and short sale subdivision so the discount was deep.

The short sale was approved today to close by July 18. That will be no problem on the buyer side since this is a cash offer. However, Bank of America the second mortgage had already approved the sale, but since HomEQ is taking a big hit they lowered the net to Bank of America. I contacted Bank of America immediately and to my surprise I have to send the entire file again for reviewing, a simple revised preliminary HUD was not good enough.

Now, I am trying to understand this- Lets continue to waste valuable time, paper and ink to receive the same information I sent you a month ago.

I hope I can get Bank of America to review quickly. Every time I would contact them before I had to wait 5 to 10 business days for the information to appear in their system.

Posted by Yoana Pelaez, P.A. on 06/30/2008 01:50 PM

Comments (34)

homeq, bankofamerica, lenders, foreclosure talk, short sales, short sale specialist, short sale realtor

Originally posted at: Yoana's Blog: A SUCCESSFUL SHORT SALE WITH HOMEQ SERVICING

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34 Comments on A SUCCESSFUL SHORT SALE WITH HOMEQ SERVICING

JUN

2008

Congratulations.

I find that short sales will become more and more prevelent, as work goes up.

Bill

JUL

2008

Thanks Bill- No answer from Bank of America yet.

It looks, to me, that banks are not taking advantage of the opportunites that are given to them. They are foreclosing on many properties where they have a ready buyer.

They should hire more people and help us help them!

Hello Jose,

Thank you for your comment

It is always good to hear about a smooth transaction especially with a short sale.

Hello Mike

Not so good right now with Bank of America. They just told me they need at least 10 more days to review the offer. I explained about the property being foreclosed and the first mortgagee approving the sale to close by July 18. They simply don't care !!!!

AUG

2008

Yoana, any update for us? I'm currently in the exact same situation that you are in and I'm about to loose the buyer. Very frustrating.

AUG

2008

Michael,

I apologize for not getting back to you sooner, I took a mini vacation to refresh the mind a little.

HomeQ has been incredible and they just approved the new offer to Bank of America. This is the 3rd time they approve the increase. They are very helpful, understanding and VERY fast.

On the other hand, I am now faxing the new offer to Bank of America to see if it gets approved. It takes them 5 to 7 days to get to the hands of a negotiator. Hopefully this time it will work and we can close this deal by the 15th.

Good Luck to you,

In my experience people who have 2nd mortgages are normally harder to short sale just because of the reason you stated. The second stands to receive very little from a sale. But if a forcloseure occurs they will normally receive nothing. So, one would think that a short sales seems to be better for everyone. A win-win!

AUG

2008

Juston,

I agree with you, but from my experience they just don't care. They are losing thousands of dollars, an extra $2000 to $3000 makes no difference to them. Although you would think they should take whatever is offered to them and move on, multiply $3000 by thousands of files and that's partial income to pay all your negotiators their salary

Yoana,

Good luck with BoA's approval but I'm not sure that it will go as well now. My understanding from many calls to the bank is that they revised their approval guidelines for 2nd notes on Monday, July 28. Notes in 2nd position (or possibly just HELOCs, I'm not sure) will only be approved if the offer is for 10% of the outstanding balance. They also require that the total real estate commission be limited to 4%.

My existing deal - with Countrywide as the first note - has fallen apart. Countrywide will only approve $3,000 to Bank of America. BoA demands $18,000. My prior approval, good through July 24, was for $5,000 to BofA but they don't care. Now they will only accept the $18K.

Let us know if you have better luck. I'm not giving up the fight yet but I need to somehow find a buyer willing to go up by $15K from my approved-by-Countrywide offer (highest of 7 offers) with the difference going to Bank of America as cash. A tall order.

AUG

2008

B of A has always worked well with us. Call and escalate to a supervisor, tell them it is an approved file and there is a closing issue, this will accelerate things.

http://short_sale_expert.activerain.com/

AUG

2008

Joseph,

I have spoken to supervisors!!! B of A guidelines have changed. If the offer is less than 10% of their pay-off, they will not even consider the offer. Also, if the offer is less than 50% of their pay-off then Realtor commission cannot be more than 4%.

Have you been able to get anything approved after the new guidelines.. If so, can you please provide me with the supervisor contact information?

Thanks,

I would appreciate the supervisor contact information as well. Like Yoana, I have escalated to supervisors and received the exact same feedback.

I have not had an issue with offers of less than 10% of payoff, but I have been advised of the 4% cap, which I will fight all day long.

Joseph -- Is this success after July 28th or before? I was doing fine before that date but not since...

We didn't have an issue before getting offers approved for as low as $3,000.00. But have you negotiated with them after their new guidelines? I believe, if i'm not mistaken their new guidelines took effect about 1-2 months ago.

Michael,

As you can see I had no better luck with B of A. Hopefully, we can get the contact info from Joseph,

Thanks for your comments !!!

I closed one a month ago, and I am working with them on one now. I will keep you posted as to any issues I may have and possible solutions.

http://short_sale_expert.activerain.com/

SEP

2008

I am negotiating with B of A on a 2nd - at first I was told 5% then I was told 10% or $5,000. They would not acknowledge receipt of my package although I had sent it many times. Now, today I called and they told me it was charged off and to call their Recovery Dept. The Recovery Dept said it was turned over to Nationwide Credit and Nationwide Credit states they don't do business with B of A and gave me a number to call at B of A which indicates they are closed for the day (it is noon my time)?????? Has aynone had a similar experience or do you have any suggestions. I think this is where I give up (after 9 mos). The foreclosure has been postponed 30 days by Citi Mtg the first lien holder....

SEP

2008

Joseph- Any updates on your Short Sale with Bank of America???

Shirley- Unfortunately, B o A's new guidelines are 10% or they will not consider the short sale. My buyer backed out of the deal. However, HomeQ was very helpfull till the end and re-negotiated with B o A plenty of times. Good Luck to you !!!! and Good luck to Bank of America!!!

SEP

2008

I take it BofA didn't like the 1k that HomeEq was offerring them? ;)

The funny thing is that HomeEq doesn't like when they get the 1k in second position! What hypocrites!

Anyway, the most you can squeeze out of HomeEq is $2500 (or at least that's the number I got). The rest will need to come from the buyer, the seller (yeah right) or a cut in the commissions. I always push the buyer.

Another thing, you're wasting your time with BofA. Find out what they want to release the lien and have the buyer pay the difference. Create one Hud-1 to give to HomeEq showing that BofA is getting $1000 (or whatever they are offering) and then create one Hud-1 for BofA that makes BofA happy. The real Hud-1 can be just for the buyer and seller and the foreclosing banks don't need to see it.

Regards

first of all, if the first is taking a loss, the second should never be recieving more than $1,000-$2,000. If they whine and cry, too bad, such is the life of a second lien position. Hold your ground on it.

Second, making phony HUD's is a RESPA violation, and the title company will call you on it. The title company will also send the HUD's to the lender for review before funding anyway's, so sooner or later you will get busted. Bad idea.

http://short_sale_expert.activerain.com/

Joseph - Holding your ground or being a hard ass, with people who make $10/hr and that could care less if your file is rejected or not, is not a good idea. I've seen some SS seminars suggest to use the silence tactic after presenting info to the negotiator. I can tell you that your file will be closed on. I know it makes no sense, especially since they will make nothing (in some states) if it gets foreclosed on, but they have policies in place that the negotiator has to follow. Your goal is to kiss ass and WORK with the negotiator to make their job easier so they can approve your file.

Regarding RESPA violations, etc. You need to find a title (or escrow in my case) company that will work with you. The real transaction, in which both the seller and buyer recieve a final HUD-1, should not be tampered with at all. That is true. However, the final HUD-1 you send to HomeEq and BofA, no one will ever call you on it.They just need it for their records.

Amiri- Hahhh, I don't know about that, and I don't think any title company or any broker would put themselves in that position. We are talking about RESPA!!!

Joseph- Funny, I just read your reply on that !!! Pretty much looks like mine....Thanks, I tried !!! BOA new guidelines are 10% or nothing... So even if the buyer agrees to pay the extra percentage the 1st lien holder will not approve more than the $2,500.00 to BOA.

Amiri- I agree with you as to making it work with the negotiator, they really don't care if it closes or not. However, I will not mess with RESPA even if it has to do with a third party.

So I was right about the $2500 from HomeEQ. You push them and they will come to $2500 (but I don't suggest you do that unless you really need to). They also want you to close within 2 weeks, whether or not they are in 1st or 2nd position (another of their stupid company policies). I always tell them OK and then just get an extention. Overall, nice company and negotiators to deal with.

Regarding RESPA. You guys think too much like real estate agents. I don't get escrow (we use escrow in California) involved until I have an approval letter. Escrow's HUD-1 and the one they do for me are different. There are no RESPA violations to deal with. Just create a HUD-1 showing that BofA gets $2500 and give it to HomeEq. The same rule applies when the first agrees to a 6% commission and the second only allows 4%. I bet you guys end up with 4%. ;)

Bottom line, if this deal was mine, it would have closed on July 18th with the buyer paying the difference. But then again, we wouldn't have this wonderful blog entry! Thanks Yoana!

Regards,
Satar Naghshineh

SEP

2008

I totally understand your concept of not arguing with the underlings. At this point, however, I would have escalated to an upper lever rep, and I will hold my ground. You do not have to be argumentative or combative, but I will hold my ground on certain things.

As far as doing two sets of HUD's, how do you get around the fact that if you alter the commission, or any other cost, then the net to lender is also altered? If B of A sees and approved one figure, and you close on another, how does that work? Also, more and more lenders require a review of the closing HUD's before funding, so how do you deal with that?

My experience is that in some cases, the first and second have relationships in which the second will accept the $1000-$3000 because the second might be the 1st and the 1st might be a second on another short sale. However, if that is not the case, there is no negotiating as they have to follow their policies. Like in this case BofA and HomeEq, to the best of my knowledge, do not have this relationship. You might want to ask BofA, but that's all you can do. You will lose the short sale if they don't get the 10% as they stated.

The HUD is easy. BofA's HUD will still see the net payoff to HomeEq and the Net Payoff to BofA will show:

Net Payoff to BofA $10,000

Contribution from buyer $7500

Contribution from HomeEq $2500

The buyer's credit of $7500 will be on the BofA HUD-1 (and the real HUD-1) so it balances out. HomeEq's Hud-1 will not show the $7500 buyer's credit and will show a net Payoff to BofA of $2500. On both HUD-1's, the net to HomeEQ will be the same. Both HomeEQ and BofA will be happy and your short sale will close on time.

In California, since we are a trust deed state, it's funny (or sad) that sometimes the second dictates what expenses will not be paid when the first (who is taking the loss) already approved them. The second will be wiped out and they should be happy if we give them anything, but their company policies dictate that their HUD-1 cannot show agents getting 6% commission or the buyer getting money for closing cost (or whatever), so instead of arguing with their logic, we just send them the HUD-1 that they want to see while keeping the real HUD-1 between the seller and buyer. No RESPA violations.

For the life of me, I cannot understand why they dictate these policies and I am sure they are smarter and more knowledgable than I. There has to be more to it that I am not understanding.

Anyway, good luck. I hope you fix BofA before HomeEq closes the file and you have to start all over because HomeEQ will route you to collections when the file is closed.

SEP

2008

so, when the lender demands to review the HUD at close, before funding, how do you get around that?

The buyer's lender has the real hud that is between seller and buyer. This is the Hud-1 that shows that the buyer is paying $7500 towards BofA. We are not trying to hide anything from the buyer's lender or the seller and buyer. We are just trying to make the foreclosing lender (in second position) happy.

You can rationalize any way you want, eventually you will get busted.

Thank you for all your comments, this is what blogging is all about....

I believe if you have to hide it, it's a violation and/or not legal... Because of stuff like this many mortgage brokers and Realtors have lost their licenses and/or are in jail today, and many Lender's are losing money every day due to the fraud committed in their files.

Good luck to all that are doing this kind of stuff to close the deals. All these HUDs require sellers signature, buyer's signature and the approval of a Title Company. Everyone involved will be investigated.

I appreciate your concerns. The final HUD that the first and/or second needs is only signed by the seller so that they can approve the costs. Maybe there is some confusion. I even create the initial hud 1 myself. The one that escrow creates and is signed off by all parties (buyer, seller and buyer's lender) is legit and factual.

But whatever...good luck to you guys. Better hope that HomeEq doesn't close the file while you're "holding your ground" with BofA or you will need to start all over!

Anyway, good blog. Hopefully it helps other agents who are facing this common issue while doing their short sales.

JUL

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