SHORT SALE HORROR STORY!

By
Real Estate Agent with CHANE REALTY INC 3230505

Short Sale Horror Story!

Halloween is just around the corner.  What better way to celebrate than to share a short sale horror story and bank debacle.

This, of course, is a TRUE story.  I have decided to name the lenders/bank, but not the representatives or agents.  I have no problem holding the lenders/servicers accountable for their foolishness and absurdity with regard to the short sale process, which they continue to complicate further and further.

So many words come to mind when describing the short sale process, rules and guidelines they create.  Some words I cannot express in this article, but you know what they are.

“Lost in Short Sale Hell”

Lender/Servicer:  Countrywide / Bank of America

Investor/Owner of Note:  Fannie Mae

Loan Balance: Approx. $161,976

Current Market Values:  $20K - $30K

Time Frame:  7 months and still going

Current Offer:  $30,000

Location: Desolated townhomes of Palm Beach County, Florida

This short sale takes place in a community with approximately 140 townhomes.  Of course a large portion of them are foreclosed, in foreclosure, or behind in payments.  As of April 2009, there was only one (1) sale since July 2007.  It sold for $30,000. 

The development’s HOA is broke and no longer in operation.  Therefore, it is currently in receivership and a local attorney is assigned as the receiver.  The receiver has no interest in getting these properties sold.  He gets paid every month he has to service them.  He’s actually telling buyers they’d be crazy to purchase in the community.

This short sale file was submitted to Countrywide/Bank of America on March 18th of this year when files were being processed slightly quicker than they are now.  Since this is a Fannie Mae loan, two (2) BPO’s/Appraisals were required.  By May 19th the negotiator contacted me to inform me that the offer was too low and we would have to counter at a higher amount.  At which time I asked how much and he replied, “$35,000.”

That’s correct!  Our offer was for $30,000 and property values would continue to decline.  They were willing to forgive over $100,000 of the original note without a second thought, but the file died on the last $5,000!

There have now been two new foreclosure sales for LESS THAN OUR $30,000 offer…one for $29,750 and the other for $21,000.  These sales were to an investor looking for properties to rent.

A new offer was submitted to Bank of America on June 29th, but to this date they can’t find the new appraisals that had to be completed and new ones have been ordered.  The file has been escalated to upper management at least four times. 

I have yet to figure out was “escalated” means at Countrywide/Bank of America.  I was actually told during a recent call that the “escalation” team now has to reply to the escalation request after the first notice and their response is monitored.  Now, who is doing the monitoring is still in question.  They still haven’t replied to any of the escalation requests.  The file is lost in SHORT SALE HELL!  We are still waiting on the appraisers’ calls.

I’ll have another Horror Story shortly.  There are sooooo many juicy ones from which to choose!

Share your Short Sale Horror Story with us!

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Rainmaker
811,539
Cindy Edwards
RE/MAX Checkmate - Johnson City, TN
CRS, GRI, PMN - Northeast Tennessee - 423-677-6677

And yet another reason I am not fond of short sales!

Oct 15, 2009 02:02 AM #1
Rainmaker
1,025,715
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

i have 6 files that are Countrywide I call for updates weekly one is now over 11/2 years old and they still cannot make a decision.  Oh yea the BPO was too old had to get a new one.

Oct 15, 2009 02:04 AM #2
Rainmaker
288,422
Cherry Wings Realty
Cherry Wings Realty - Traverse City, MI
Your Traverse City Michigan Realtor

Felix:

OK, I now feel very fortunate for our market here in Northern Michigan.  Things are challenging here in the short sale  /  foreclosure market but nothing like your story.  Keep your chin up and a smile on your face.  this too shall pass.

Christine

Oct 15, 2009 02:05 AM #3
Rainer
423,083
Peggy Chirico
Prudential CT Realty - Manchester, CT
REALTOR® 860-748-8900, Hartford & Tolland County Real Estate

I have lived through several myself, only a few of which were successful. My worst one was that we were $7000 apart on a $212,000 offer, the bank could not get out of its own way, and in between the house had freeze damage and was condemned.  It finally sold for $60,000 than my client offered.  And we were glad to be rid of it!

Oct 15, 2009 02:06 AM #4
Rainer
6,438
Paul Della Croce
RE/MAX 440 - Doylestown, PA

Felix my friend, I'm going through the same process as you.  I'm a CDPE, which allows me access to a forum where other CDPE's can discuss their experiences with certain banks and other situations  (It's quit a good resource).  But anyway, to get to my point, we're not the only ones going through this.  Stories of waiting 4 months, then going to phase 1 then phase two and then the file is lost or too old and you need to restart, are not uncommon.

I submitted my short sale package 9/4/09 with two lenders.  1st BoA and 2nd (local bank).  2nd called me 10 mins after I faxed paperwork however I'm still waiting to become ACTIVE with BoA.

Good luck!

Oct 15, 2009 02:16 AM #5
Rainer
174,964
Mary Jo Quay
EXP Realty - Minneapolis, MN
I Move You Home

I beg buyers to avoid short sales. Some of the listing agents state unequivocally, EMAIL ONLY, NO PHONE CALLS.  Like that is going to help.  Last year I had a buyer who offered full cash price, we were hung out for five months.  The listing agent never ever, not even once spoke to me, she always had an assistant email a response.  After waiting for five months I got a voicemail saying that it was too close to redemption to accept, the declined our offer.  I countered that we were cash, could close in a week.  Zero response.   Last night I just withdrew another one that has been sitting and sitting and sitting.  The listing agent is a phantom and has some guy named Hercules answer the phone on occassion.

I've been reading that the rules are about to change, or have already.  Fannie will require that short sales only be approved after a loan mod or refi has been offered to a client.  The bank will do their bpo up front and decide on a price point before it goes on the market.  Are they playing with us, or are they really going to make it work?    

Oct 17, 2009 03:59 PM #6
Rainer
12,340
Dawn Uselding
A New Dawn Real Estate Services, LLC - Manitowoc, WI
Short Sale Assistant

They are going to try to make it work.  BOA has had its problems with the addition of CW short sales, but I have had good luck with BOA.  They are really making an effort to service the short sale offers in a timely manner.  That phase 1 phase 2 stuff was CW, BOA no longer does that. 

The secret is to stay on top of the process! You have to have complete packages properly labeled.  You need to let them know that you will be calling in a few days to make sure that they are moving forward with your file. Because of the MHA mandates, you also have make sure that the seller responds to the lender when they contact them to assess their finances for loan mod, forbearance or re-fi.  If not you can get stuck in the loan mod phase and never even move on to the short sale. 

Another thing you can do is supply updated financials every 30-45 days, before they ask.  Keep the documentation current and keep your file on the top of the pile.  I suggest that you use a virtual short sale assistant if you do not have a short sale assistant in house.

A good virtual short sale assistant is worth their weight in gold. However beware when you do use this kind of company.  Do your homework before your entrust your business to an assistant.  Make sure they are knowledgeable about short sales.  If they are doing these everyday they should be on the front line with new information on how the packages are processed.  This can be invaluable to you, the Realtor.

You should always get references, more than one.  And really call them.  You would be surprised how many times you are given a reference that isn't even someone they did a short sale for.  Make sure they have been in business for at least a year.  There are many new "short sale assistants" that come and go in 6 months or less.  Also they need to have a comprehensive system for handling your short sale and a way for you to monitor your short sale WITHOUT you having to call them and ask for a progress report.

 

 

 

Nov 04, 2009 10:04 AM #7
Rainmaker
811,390
Pete Xavier
Investments to Luxury - Pacific Palisades, CA
Outstanding Agent Referrals-Nationwide
No more scary stories, going to have a hard time sleeping.
Jan 19, 2013 03:29 PM #10
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Rainer
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FELIX SANTIAGO

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