WARNING: To Anyone Possibly Conducting Short-Sale Business With First Federal Bank in L.A.

WARNING: To Anyone Possibly Conducting Short-Sale Business With First Federal Bank in L.A.

I feel obligated somewhat to warn ALL of my colleagues about attempting to work toward mutual resolution with First Federal Bank; DO NOT DO IT!

This bank's short-sale policies and protocol are such that one can only summize that they do not truly wish to do them. First Federal Bank is a portfolio lender out of southern Cal, (Los Angeles). I've recently had two nightmarish encounters with them. I will not drudge on relaying every awful detail of those two stories; instead I will simply bullet point a few of their more troublesome policies and allow YOUR imagination to work:

- Faxing & emailing not permitted; ALL docs, and submissions must be mailed.

- They absolutely DO NOT pay credit backs to Buyer, NOT even for FHA, no exceptions.

- 2/3 of the HUD items "normally" paid by lenders, First Fed will NOT pay.

- Commissions may begin at 5%. If the agent is double-ending the deal, its 2.5% TOTAL commission, no exceptions.

- They offer little or NO assistance toward Jr. lien payoff; & further, will NOT allow anyone else to contribute to Jr. lien release. If they see it on the HUD, they will take it, applying it to their net proceeds.

- Regardless of the probable outlook of any short-sale review, First Federal DOES NOT, ever postpone Trustee Sales.

- Check that (above); they WILL postpone Trustee Sale action IF they have a FULLY approved short-sale, and IF... the Buyer wires $10k, thats right, $10 grand to them for a one-time 30 day postponement. The $10k is not refundable if you do not close. If you do, it goes toward the net payoff.


I could go on, but do I really need to? This bank is REDICULOUS!! I have an agent that worked with a Buyer for 8 weeks, showed them 2 dozen homes. Just so happens that the home she finally got the family to settle on was her own short-sale listing. Because it was her own listing, because it was First Federal Bank, she gets a total commission of 2.5%. So, after 8 weeks she simply does not get compensated for the representation of this Buyer because she hooked them up with one of her own listings?? Really?

Now, I am aware of, and respect the fact that the short-sale alternative is not something the banks are even obligated to entertain; I do. However; if you are going to accept these proposals for review, then do it seriously. We have determined that First Federal Bank is NOT serious about considering short-sale proposals and have therefore concluded to refuse these files with liens from First Federal.

We strongly, strongly urge our colleagues to do the same... don't waste your valuable time.