Are Sacramento Short Sale Sellers Submitting Phony Purchase Offers to Countrywide?

Yep happened to us. They put the wrong name on a file. Delete, start over.

Ridiculous.

Elizabeth:  I am 100% convinced that there are agents in our market that do this.  One in particular always seems to have approval for a contract the fell through.  Makes me wonder.  Then again, if Countrywide wanted to avoid this problem, perhaps doing a BPO upfront and dealing with short sales the way they would their REOs might be helpful.  Give us guidance on what you will accept, and we'll sell it.  Just a thought.

Boy, the more I read about short sales down there, I am further amazed.

OMG, that is not only the height of stupidity it also smacks of a way to steal a property sale from the owner.

Picture this little ditty: The owner has a buyer and is trying to salvage his or her credit. Someone decides there is too much equity in the home and would rather sell it themselves through their firm for more money. Oops. I'm creating a problem just for your file. Hey that problem I created? It closed your file. Bye homeowner, I have a profit to make off of your home now. See ya...  Oooo... can I buy this property that I created a problem for from the firm I work at with a bank loan so my employee doesn't have the expense of a foreclosure sale and gets a new mortgage for the books? Can I? Can I? Will anyone ever be able to see if bank employees and vendors have brought these things? Is there a hypothetical cottage industry of flippers hidden within our lending institutions we should be investigating and looking for. I don't know. I'm just wondering if it is possible. Seems everything is possible these days... 

Here in CO our title company's closer does the HUD1, then makes changes if Countrywide requires it.  Could that work there, too?  Might eliminate this one thing.

Countrywide will make one wait a month or more for any response at all, but once they contact you, you have 72 hours to comply with whatever they're requesting or the file is cancelled.  Happened to me when I was unreachable on vacation, but informed Countrywide via email and phone messages who to contact while I was gone, left the message on my cell phone greeting and at my office.  They just cancelled the file 3 days later. 

Still, like you, I've closed every short sale I've had.

ELIZABETH,

This stems back to the agents that submit multiple contracts in the lenders no matter how ridiculous they may be. The results (and this might answer Chris Ann's question) is that the lender is actually wasting time by processing a "fake" contract that they will not accept. The theory is that the lender would come back with a counter offer. If it did, the agent would quickly start to market the property as "approved" and try to get a quick contract.

These are the reasons some lenders put such strick time limits, won't counter offer or even tell us what their bottom number would be. Too many agents try to circumvent the process or trick the lenders for their gain. It gives all of us a bad reputation and no credibility.

Here Florida, there were agents that were writing up contracts at low offers, signing them and submitting just to get the process started. Is there any wonder the lenders are making it more difficult for the rest of us?

A tidbit about Countrywide, they are the biggest servicer of mortgages in the world. There are thousands of investors they have to deal with that have hundreds of different parameters with acceptance of short sales, hence they seem as if they're totally confused.

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Just about the time I think we've heard about everything, a new curve break surface.  You hit on something I hadn't even considered, that a seller would submit phony offers to delay a trustee's sale. 

I had considered that sometimes properties were offered via "short-sale," and seller family members were buying the homes for a price slightly higher than the highest bid.  When you stop to think about it, the seller has visibility to those offers, but the buyers are dealing in a vaccum of information about other offers.  A seller could easily tell a family member what the high bid currently is and keep the home in the family.

That is not good news . seems there is always some bad apples that manage to get all the attention and the PROCESS changed. How come the GOOD ONES can't seem to make as much headway? Soooo frustrating.

Hi Elizabeth, I thought "do-overs"  went out in grade school! I guess I'm surprised by this!

Just an idea here ... maybe instead of throwing billions of dollars at the housing crisis, we could assemble a task force of real estate agents, lenders, and title companies that could come up with a system that is accepatable and productive for all? The everchanging short sale process and CW's arbitrary time frames sounds really frustrating.

I really do wish I could say I'm surprised by your post, Elizabeth, but I'm not.  Countrywide has been a thorn in my side for so long, I can't remember.  I actually thought that once BOA took the reigns, things would improve - but just the opposite has happened.  My latest deal with CW as the seller just closed this week.  The file was canceled 4 times in mid-escrow, and 3 of the 4 times were caused by their own "system."  We did finally close, but 30 days after our contracted date.  I now literally cringe whenever I show a listing where CW is the seller.

p.s. Fraud is alive and well here, too!   ;-)

ELIZABETH,

I don't agree. There is no fiduciary responsibility to submit all offers to the lender, as a matter of fact the Short Sale addendum, here is Florida, states as such. The lender is not a party to the contract they are merely a contingency that needs to be approved, much like the financing and inspections. Submitting several offers to the lender confuses the process and makes mistakes that much more probable. There should only be one CONTRACT submitted to the lender.

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JOHN,

That is exactly the problem. The bailout money has not been thrown at the housing crisis. It has been thrown at the lenders which in turn assist the homeowners they CHOOSE to assist since all the legislation to date, including the Obama plan, make their involvement voluntary. We will turn the corner when the homeowners and the toxic mortgages are addressed and that has not happened.

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RANDY,

Keep in mind that CW is the largest "servicer" of mortgages in the country. Most of the time they are following the parameters of the investor that actually owns the note. That gives them the appearance of being totally disfunctional whne in reality they are the middle man between the seller and the actual owner of the mortgage their are trying to get an approval from.

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Hey Sidney...  are you on CW's payroll, or just taking a commission off the CDPE course?  LOL  Elizabeth simply reiterated her experiences with CW, that many of us are also experiencing around the country.  Saying that CW is a big loan servicing company is simply making excuses for them.  Do you think a buyer client gives a rip?  If they're going to place the property on the market, then they need to step up to the plate and act responsibly and ethically toward the offers that are presented to them.  If their system is still broken, then I don't see where canceling a file in mid-escrow is helping anybody, including their investors.  Instead of getting excuses from them (or you), give us a solution!

RANDY,

I'm an agent just like you and on nobodies payroll. My point is not to make excuses for CW, my point is for everyone to realize that it is not just CW that you might be dealing with, but they are just the front man for the person or institution that actually owns the mortgage. We can't sit around and expect them to get better because the fault is not entirely on them. They just follow their clients guidelines. If we take that into account then we won't start the process with dread and fear.

Unless we understand what they are going through we won't be able to craft the most streamlined process we can. I have that process and I can understand what they are looking for so in turn I can put together the package that is necessary to convince the OWNER of the mortgage that my deal is better than foreclosure. That's the just the bottom line. The owner of the mortgage needs to be convinced that your deal is better than the alternative.

Most agents just expect to have their offers accepted because they say so, and if it isn't then the lenders are stupid. Turn that around. Why are lenders refusing the offers being submitted and craft an package that will address those concerns before they come up.

If the lender wants market value and their opinion is different from yours then you need to let them see that your price is the best they can do. Meet the person doing to BPO and let them know how you got your price. We need to stop hoping and start taking charge. Do you see it differently?

One last comment, Sidney, and I'll leave Elizabeth's post alone.  No, I don't see it one bit differently.  All I hear from you is that YOU have a better mouse trap.  Care to share any ideas or suggestions for us, since you seem to have all the answers?  I didn't hear "fear and dread" in Elizabeth's post ~ what I heard was frustration, irritation and delay.  And for what it's worth, I've yet to have a person doing the BPO allow me to meet with or discuss pricing, theirs or mine.  But hey, it sounds like you have it all figured out - so best of luck to you!

RANDY,

I didn't want to imply that Elizabeth was talking about "fear and dread," it's more of a general consensus when your read the posts pertaining to lenders being lost or unorganized and having to work with certain lenders.

As far as the thing I do, well, for instance I do meet with every person doing the BPO. I don't ask them if they want me there but I remove the lock box so I have to be there to give them access. After a bit of chit-chat and without making it seem I want to tell them the value, I ask if I can share some of the data I have that could help in their evaluation. Either they take it eagerly, or they will tell me that they have it covered. In either case I try to see if I can get some insight as to the parameters they were given. If they can use REO's, other short sales, how far back they can go for comps. Basically any information that might help in the conversations about value in the event the BPO comes back significantly higher. If it does come back higher then we have those conversations of persuasion. If that doesn't work and I'm confident of my pricing, then I will try to negotiate a second BPO. The approval to the short sale can hinge on the BPO, why would you leave that part of the equation to chance?

Sometimes the biggest challenges is that the price is too low and they think they can get a higher price. Well, depending how much time I have in the foreclosure time line my pricing will involve price reductions on a consistent basis until we reach the level that will garner a contract. I can then show them that we tried to get the highest price we could but the market decided the point where they were willing to buy was lower than we both (the seller by virtue of the pricing and the lender by virtue of that they are owed)would have liked.

It's not a matter of figuring it all out, it's a matter of examining the lenders objections and find a way to neutralize them instead of hoping they will get their act together and realizing why they do what they do. Just building a better mousetrap, we can all always get better.