Bank of America/Countrywide "Forgets" to Ask for Promissory Note

Real Estate Broker/Owner with Rulnick Realty, Inc.

We all make mistakes, but this was a big one, by a big corporation...  I was in negotiations for a short sale on a Crestview, Florida listing.  My sellers owed Countrywide/Bank of America about $175,000 as the senior lien and around $25,000 to Citi Financial as the junior lien.  The sale price was a spot-on $150,000.

Bank of America asked for a promissory note of $5000.  Although my sellers had recently divorced and had to move to separate homes, they both had stable jobs. Bank of America told me that was a factor in asking them for the note. The couple agreed, and I emailed the negotiator.  A few weeks later, BOFA approved the short sale.  YEA!  And they did not even ask for a note!

Bank of America Approval

My next problem was to tackle Citi, who had initially farmed out the listing to a collection agency, as I wrote about in "Rude and Crude- Nordon Collection Services".  After I complained about Nordon's uncouth behavior, and hanging up on me, Citi took the file back.  They requested $6000 as a pay-off to release their lien.  BOFA would only pay them $3000, so my sellers agreed to pay the other $3000 at closing, each having to borrow money to do so.

Finally, the home closed!  After months of wrangling, the sellers were thrilled to complete that phase of their lives.

Until yesterday, that is.  Bank of America called asking where the note was.  This is a month after closing.  They sent me back a copy of my own email to them stating the sellers would agree to a note (pretty shrewd, huh?) The negotiator then called me, demanding the note be paid.

I responded, incredulously."The note?" I said, "You did not require a note in your approval letter.  The sellers based their decision to borrow money to pay Citi on the fact that you did not require a note.  They have nothing more to give....  Is someone in trouble at your company?"

"Yes" he responded.

It's Wendy!

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Destin FL Real Estate

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Wendy Rulnick, Broker/Owner Rulnick Realty, Inc.

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Roy Kelley
Realty Group Referrals - Gaithersburg, MD
Roy and Dolores Kelley Photographs

Was it your responsibility to bring it to their attention when the note was missing?

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Jun 09, 2009 12:27 PM #1
Charles Stallions
Charles Stallions Real Estate Services - Pensacola, FL
800-309-3414 - Pensacola, Pace or Gulf Breeze, Fl.

On my short sales countrywide has not even talked about a promissory note. BOA did once but the seller refused at closing and they went ahead and accepted the offer. What seller would want to do a promissory note and what agent would recommend it. Might as well let them have the property back if that is the case.

Jun 09, 2009 12:50 PM #2
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

YIKES!! I'd say the negotiator dropped the ball on this one. Only took them a month to discover their error? They're getting better :)

Jun 09, 2009 12:58 PM #3
Irene Kennedy Realtor® in Northwestern NJ
Weichert - Lopatcong, NJ

Oh, no, Wendy! Did you immediately get on the phone to the sellers' attorney?

Jun 09, 2009 01:06 PM #4
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Roy - This is not the first time Countrywide/Bofa asks for something, but does not demand/require it. The deal is closed.  There is nothing they can do.

Charles - That is up to the seller if they want to pay a note or not.  Not me :)

Bryant- They screwed up.  Too late.  It is closed.

Irene - No need.  After I responded they desisted.  They closed, and approved the sale without the note.

Jun 09, 2009 01:25 PM #5
Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

HEHEHE you have to love it when they start to point the finger back at the agents.  They filled out the paperwork, they signed the paperwork and they saw the HUD-1 prior to closing.  DUH!

Jun 09, 2009 01:26 PM #6
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Cindy -  When they want a note at closing, they provide the document, too.  Duhhh is right!

Jun 09, 2009 01:29 PM #7
Chanda Barrick
Keller Williams Indy Metro Northeast - Indianapolis, IN
in referral

Whew, glad that one worked out.  Good thing it was in writing and you had it readily available for them to review.  Seems there's always a story to tell about Countrywide...Sorry...Bank of America and how incredibly on the ball they are... Yes I'm saying that with sarcasm.  :)

Chanda panda

Jun 09, 2009 02:44 PM #8
Anne Hensel
South Beaches Real Estate Professionals - Saint Petersburg, FL
Realtor - Broker - St. Pete Beach, Treasure Island

The never ending short sale stories. It does not even amaze me anymore. New day, new story.

Jun 09, 2009 02:54 PM #9
Robert Schwabe
EXP Realty - Orange Park, FL
Orange Park Real Estate

Wendy - Wow someone really let this one slip through the cracks at BOA.

Jun 09, 2009 03:10 PM #10
Eric Reid
Renaissance Realty Group of Keller Williams Atlanta Partners - Lawrenceville, GA

What is it we learned in real estate school what is on paper sign and agreed by all parties rules. you email was not an agreement the letter with teh big ZERO was an agreement

Jun 09, 2009 03:23 PM #11
Jim Hale
Eugene Oregon's Best Home Search Website

Rest assured that if the mistake had been yours, they would have said:  Tough!

Or something like that.

Jun 09, 2009 07:15 PM #12
Sally K. & David L. Hanson
Keller Williams 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

The one we like as much is the famous Wells....we will release the lien, have the sellers agree to "work it out" out what rate...we don't go there without everything in writing...signed in "banker blood"...who agrees to what they don't know they are agreeing to....?  Good less sloppy mitigator on the fully employed lines !

Jun 09, 2009 11:40 PM #13
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

Wow that looks like a substantia error! Great to hear you got another one to the closing table Wendy:)

Jun 10, 2009 12:33 AM #14
Patrick Schutte
Flex Realty - Prescott, AZ

Reminds me of a bank deal I did where I got the bank to agree to:

Seller to convey social membership at closing.

They agreed but were surprised when it turned out to be worth $14k to my buyer.

:) PS

Jun 11, 2009 09:48 AM #15
Virginia Hepp - Mesquite NV REALTOR
ERA - Mesquite NV Homes For Sale - Mesquite, NV
Mesquite NV Homes and Neighborhoods - Search MLS

Wendy, I really like hearing your short sale success stories - this one really made me smile.

Jun 11, 2009 02:56 PM #16
Lois Davies
Century 21 Birchwood Realty, Inc. - Cape Coral, FL
Cape Coral & SW Florida

Great story Wendy.  One of my short sales is with the now Bank of America, it is my dauthters home and I hope they make the same mistake.  I am crossing my fingers..

Good for you!!

Jun 16, 2009 11:47 AM #17
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