Here's the scenario:
Client bought the property (investment) property) in 2006 with 100% financing. Countrywide, now Bank of America, has both loans.
May 2008 makes a payment of $4800 on the 1st TD. They lose the payment. She pays it over the phone. However, she doesn't put a stop payment on the check. Ok, you know where this is going.
September 2008 she stops making payments on her 'bad investment'.
End of 2008 we put the house on the market as a short sale.
House goes into escrow April 2009.
Mid stream through the short sale BofA sells the 1st to HomEQ. The short sale starts over.
We lose the first escrow because the Buyer, who waited 4 months, decided enough was enough.
We go back into escrow almost immediately.
SO NOW...we are about to close. I have approval from both. The Seller is about to get relief AND..
Remember the lost check from May 2008....1 1/2 yrs ago. Yep, you guess it BofA mysteriously found it and CASHED IT...
To make matter worse the Seller only had 2k in that account, but hmmmm...the bank decided that although she didn't have an overdraft acct., she was such a good customer and established one for her. The cashed the entire check. They didn't even own the loan anymore. The check was 18 months old.
Oh yeah, BofA just happened to be the Seller's personal Bank!!
I would love your comments. Have any of you ever experienced this? Do you think it the Seller had another bank for her checking account that this would have even happened?