A Tragic Journey from a Short Sale to Foreclosure.

Endre:  These stories always leave me feeling so bad for all sides in these transactions.

That is just no good. I have 27 short sales on the chopping block this month; as of today, all are still short sales. Who knows what tomorrow will hold?

The consensus of opinion here really speaks volumes as to the banks superficial attempt to make sellers and their agents believe they will sell for less than what is owed.  What about all the money they've already collected as interest on these loans, that doesn't count does it?  I feel the larger the bank involved the less likely sellers and agents can really get anywhere with closing a transaction.  God forbid the property in question needs a tremendous amount of work, these banks don't even consider that aspect when turning down offers on these loans .  They seem to go by BPO's which don't accurately reflect the interior of a property.

Endre, you did everything right & it still ended all wrong.  Watch the house for the buyers if they are still interested for the next 6 months or so.  Connections (mentioned above) don't matter a hoot. That's just a nonsense promo for your company. The banks are just insane & that's it.  You didn't mention numbers but if the numbers were OK & seemed logical, what's the reason then?

I have to agree with Lyn... Endre did everything right... it is not a post about failure by agents involved in the transaction to pull it off.   I am enjoying the comment thread, there are some interesting insights.

"the rerason we are successful is we do have the connections"

Another attempt to drum up business at the funeral for a friend (to me the post is about the tragic end of a transaction, dashed hopes.) Art Martin who's got connections comments a lot on Broker Bryants posts about short sales. Endre must not allow non member comments?  Art Martin had to join to post the plug in the comments here... ?  

"This is the exact rerason why you need a qualified short sale negotiator"

Endre was the buyers agent but I guess the commenter  does not get that... Or do buyers agents in short sales hire people with connections too?   I thought that the short sale people worked on the sellers side? 

The attorney who the LISTING agent did NOT have connections?  Endre wrote "The seller had an Attorney, who had a successful track record of negotiating short sales."

Endre, so sorry that your story ended that way for the Buyers and the Sellers. I have been living almost the same scenario as the listing agent for a Bank of America short sale transaction since November of 2009. Just a day prior to "last and final" foreclosure date, I finally emailed the CEO of Bank of America brian.t.moynihan@bankofamerica.com and the foreclosure attorneys directly and told the whole story of how negligently/inefficiently/nonsensically my short sale was handled by his employees over a 9 month period. As a result, I was assigned a liason from the CEOs office, the foreclosure file was closed completely, and the short sale is being processed by a special escalation team short sale negotiator. I am hopeful, but it is not over yet.

For some of these short sales, this may be the only way to save the homeowner from foreclosure and get the sale processed. I am writing this here and posting his email on your blog, not to toot my own horn, but only so more people might see it, than would see it on my blog which does not have a lot of readers. I think the CEOs of all the Banks should get more letters like this so he can see what is really going on in the day-to-day lives of agents like us, and the homeowners that pay their salaries. Maybe if their offices get jammed with more complaints, they will figure out a more reasonable and effectiveway to process short sales and fewer homes will be foreclosed upon. I also don't think we should have to work for free. ~ Aloha

Endre, it sounds like no one won in this situation. Statistics show that it costs a bank around 18% to short sell a home compared to 34% to foreclose. I guess this type of thinking by financial institutions isn't going to change even after all that has happened.

In the Wild World of Short Sales new rules are made on a daily basis only to be contravened the next day by more new rules. We are all wandering in the wildereness when it comes to short sales. We try what we think will work until it does not work. But...then it worked before and it will work again...it just did not work that time.

There still exist many grey areas in short sales. By the time all of the rules are formalized, they will be a vanishing breed.

This has happened to me to. Buyer was so disappointed, didn't understand it wasn't my fault.

Endre,

That scares me... We so far did not have the problem with second refusing that the buyer pays for the Seller.

I am trying to understand the logic behind and I can't. It is about money, not punishment, so why would they object?

And what if the Buyer just gives the Seller $10,000 and he puts it on the table, is it fraud? Vengeance by the Lender is OK, and trying the transaction to close to mutual benefit of all the parties is a problem?

Tough

What a broken system we have.  I believe that the banks will have about 80% of their "loss" covered by the Government..    Our financial system has to be changed.  The people that works at the banks have sipped too much of the kool-aide.   When does common sense kick in.  How does the underwriter or person at the bank who made this call look at themselves in the mirror?

I went through something similar. I was representing the buyer. Bank of America had the property. First Bank of America said they didn't have all the papers, even though I had signed documents stating that they did. Then they said that they needed updated documents. Then the person who was working with us at Bank of America quit. That resulted in us having to do everything again. Finally we get a negotiator, but as soon as we did, he took off on a 30-day vacation. Finally, 11 months later, all the ducks decided to line up in a row. Except one. The day before we got final approvaly, my client had lost her job.

Hi Endre,

I saw this post just after you wrote it and didn't comment but, KNEW it was going to be a feature!  It's happening more and more these days and is just SO unnecessary.  I've had this happen with two--actually, they just pulled the plug with an Offer BETTER than what either of them sold for AND after the costs of foreclosure were absorbed by the bank.  Forget the win-win in these situations; what the investors don't realize in these situations is that EVERYONE loses.  Lose-lose doesn't seem appealing to ANYone--why do they continue to practice business in this manner?

Endre,

Such a sad story. Banks are suppose to work with the sellers, but I haven't seen a change in the way they are handling short sales. My last was 2 years on the market, 10 offers, and the one they accepted was about 100k lower than the first!  No expediting here in Massachusetts either. by the way, got a call from one of my short sale clients. We closed February 2010. The bank sent them a deficiency bill for $52,000 it was a second mortgage from the same bank, but just before the closing the loan was sold! I find this disheartening.

Endre, sad story, great post.  Something similar happened to one of my short sale listings as well.  Makes you wonder, what are they thinking?

bet your blog is going to get hit by spam... #118 and a comment from "Veruca" on your James Hook & Co. post are two I see... that are precursors to spam.  I don't understand the spam ... but I would bet money you will see some nonsense comments soon.  Jobeth's and Veruca's comments are closer to not nonsense than what follows.  

I thought #122 would not happen if #118 and # 120 were removed almost 12 hours earlier.

Have you noticed the really long clothing spam comments on Members Only Posts?