My Buyer Wrote a Letter to President Obama about his short sale

By
Real Estate Agent with DWELL Real Estate

 

My buyer is mad! Not with me but with the whole short sale process. He has been waiting patiently for 5 months to hear from the bank who has the mortgage on a house he wants to buy. Technically, there are two mortgages - Bank of America and Countrywide. However, the 2nd mortgage holder has already agreed to a short sale. My buyer even hired an attorney to represent him and the seller in the short sale process. Everyone wants this thing closed - buyer, myself, seller, listing agent, buyers lender and probably Bank of America and Countrywide who currently have the mortgages that are not being paid.

So, out of frustration my buyer wrote a letter to President Obama asking for new laws to help with the short sale process. You can read his letter to President Obama here or I copied it below. If you have been involved with a short sale I am sure you can empathize with his pain.

 

Dear President Obama,

I am currently entangled in a 5 month long real estate "short sale" purchase. For the first time in my 40 year life I have hired an attorney. Despite my efforts and patience I am no closer to purchasing this home than I was 5 months ago when the process started. During the five months I have heard everyone say the short sale process is ridiculous, flawed, dysfunctional, etc. but nobody has done anything about it. Maybe you can!

My suggestion would be to push a bill through requiring lenders to respond to a short-sale offer within 30 days with either an acceptance or a counter offer. If the lender does not respond then a judge/arbitrator would have the ability to approve/disapprove the sale. If a lender does not want to sell the house they can simply respond to the buyer's offer with a counter offer that is really high. This sends the message to the buyer that the lender just does not want to sell the property for a loss and the buyer can move on to a different property. Currently, the lender simply withholds a response indefinitely and everyone involved in the situation sits in eternal limbo.

We, the American people, have poured billions of taxpayer money into saving these lenders from themselves only to have them do nothing to improve the real estate situation. I think the lenders owe us (that’s all of us, buyers, sellers, real estate agents, lawyers, construction workers, mortgage brokers, title companies, appraisers, local governments, etc.) some action.

According to my attorney, Bank of America only has 8 employees for the entire country responsible for negotiating these short sales. How can a company with billions of dollars on the books only employ 8 people for this? We need some pressure on these big companies to meet some reasonable timelines because their stalling tactics are only serving to stall our nation's recovery.

I could give you plenty of details on my situation but in the interest of brevity I have omitted them because I believe they are no different than the thousands of other families that are experiencing this same situation. Please feel free to contact me for further information if needed.

You are the most talented man we have had as president for a long time and we all wish you well.

Name withheld

Sarasota, Florida

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Rainer
132,114
Geoffrey Davis
BANK of the OZARKS - Frisco, TX

ugh- so sorry you all are going through this- what a mess.

Jul 06, 2009 05:56 AM #1
Rainmaker
723,755
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

Your buyer writes:

"My suggestion would be to push a bill through requiring lenders to respond to a short-sale offer within 30 days with either an acceptance or a counter offer. If the lender does not respond then a judge/arbitrator would have the ability to approve/disapprove the sale."

I like that! Wonder if it's doable? And how long then would the judge/arbitrator be given?

"According to my attorney, Bank of America only has 8 employees for the entire country responsible for negotiating these short sales"

That can't possibly be true.

I'll check back and see what others who are well versed in shorties say.

I had one close via BOA seamlessly in 2 months--and a week of that was buyer 'deciding' whether to accept the bank's counteroffer. We had a LM Analyst on the 10th day following submission of the package.

What on earth is holding this deal up for 5 months?

Jul 06, 2009 05:56 AM #2
Rainmaker
1,560,731
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

I keep telling people . . . the banks WANT foreclosure to happen.

Anyone who knows HOW foreclosures work realizes that it's a legal procees and it takes time!  So . . . stretch out the short sale to the maximum, everyone will get annoyed and leave the deal undone (or so they want this to play out!  And by "they" I mean the banking institutions).   

It's their perfect storm . . . their Trifecta.   They want the inventory (which they can SELL later) . . . the want the bail out money (which gives them all nice big -- hmmm, bonuses . . . and they want a BIG FAT LOSS on their books which will be entitled:  "101 Ways to COOK the BOOKS"  End of story!

Jul 06, 2009 06:08 AM #3
Rainmaker
102,154
Marc Rasmussen
DWELL Real Estate - Sarasota, FL
Sarasota Real Estate

I think it has taken this long because of the magnitude of the short sale. There is more than $600k owed on the property and the home is now worth around $375k.

Jul 06, 2009 06:11 AM #4
Rainmaker
723,755
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

Carla, you might just have something there. :)

It certainly is diabolical enough to make sense!

Marc, that IS a chunk o change . . . but the investor is trying what? To get blood out of a stone?

 

Jul 06, 2009 06:25 AM #5
Ambassador
1,977,966
Silvia Dukes PA, Broker Associate, CRS, CIPS, SRES
Tropic Shores Realty - Ich spreche Deutsch! - Spring Hill, FL
Florida Waterfront and Country Club Living

Nice letter... he should have added "other than throwing more bailout money away"...

Jul 06, 2009 06:25 AM #6
Rainmaker
102,154
Marc Rasmussen
DWELL Real Estate - Sarasota, FL
Sarasota Real Estate

He is not an investor. He wants to live in the house. It amazes me that the buyer, seller, me, the listing agent and buyers lender all want this transaction to go. I would think the two banks would want to get it off their books. It is amazing that he can't happen more quickly. My buyer could walk from the transaction which would not be good for anyone. The bank will just have to sell it to someone else. That would take more time and they would lose more money. Makes no sense.

Jul 06, 2009 06:32 AM #7
Rainer
21,079
Robert Ott
Century21 Beal Inc. - College Station, TX

This is still another "short sale" horror story. Another example of why many Realtors will not handle short sales.

Jul 06, 2009 06:50 AM #8
Rainer
194,086
Jeff Payne
The Payne Group at Keller Williams Success Realty - Panama City, FL
Panama City Real Estate

I knew that it was Bank of America when I was reading it.  I also sent a similar letter to the President and just about every lawmaker I could find.

Indiana passed a similar bill that required lenders to acknowledge and respond in a timely mannor

Jul 06, 2009 11:06 AM #9
Rainmaker
161,942
Satar Naghshineh
Satar - Amiri Property and Financial Services Corp. - Irvine, CA

Actually BofA is pretty fast after you get past the 4 week imaging hurdle. Also, this statement is false: "According to my attorney, Bank of America only has 8 employees for the entire country responsible for negotiating these short sales."  if that was true, I would be on first name basis with all of them!  ;)

My experience tells me that the 1st is Countrywide and the 2nd is BofA. The lawyer is a waste of money as there is nothing he can do to speed it up. You should only use a lawyer if they deny the short sale and there are violations on the borrower's loan documents.

If you read my blog on how to buy a short sale, it will make it worth the wait.

Good Luck!

Jul 06, 2009 04:09 PM #10
Ambassador
920,196
Missy Caulk
Missy Caulk TEAM - Ann Arbor, MI
Savvy Realtor - Ann Arbor Real Estate

Mark, at least your buyer took the time to write the letter. IMO they have no idea how long it is taking but it is scandalous. Ridiculous to have the seller have to screw up their credit to get a short sale done and closed if they have to sell.

 

Jul 06, 2009 11:57 PM #11
Rainer
179,139
Mark MacKenzie
Phoenix, AZ

"According to my attorney, Bank of America only has 8 employees for the entire country responsible for negotiating these short sales".

If this is true then we are in more trouble than I anticipated.

Jul 07, 2009 01:54 AM #12
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Rainmaker
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Marc Rasmussen

Sarasota Real Estate
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