Bank of America’s Bogus War Against Short Sale Dual Agency

By
Real Estate Broker/Owner with Mint Properties, Lic. #01871795 Lic. #01871795
https://activerain.com/droplet/flS

Bank of America’s Bogus War Against Short Sale Dual Agency

Let me begin with the fact that I have never been a dual agent on a traditional equity sale.  The only sales I have ever “double ended” were short sales.  In fact, I began doing dual representation transactions out of necessity on short sales in order to hang on to buyers and get the transactions closed.  I find that if I can communicate directly with the buyer they are less inclined to walk, and I also find that I am better able to locate a buyer who will be patient enough to wait through the process.  So, I had to consider dual agency to truly help my seller clients who were in financial distress and up against powerful bureaucracies.

Now apparently, Bank of America has decided that dual agency is “problematic,” and has adopted policies to discourage it, including a substantially lower offer of commission to real estate brokers who work both sides.  For a short time this year, Bank of America even adopted a mandatory addendum prohibiting it -- but they backed away from that pretty quickly and instead adopted policies to create large financial incentives against dual representation.  Further, they dictate that even if the seller or buyer could make up the difference between the offered commission and the previously negotiated commission (which most can not) they prohibit that as well.  Wow.  


I spoke to a Bank of America negotiator just this week that told me that dual agency/dual represenation was “problematic” and cited the fact that it wasn’t allowed in certain states to support his claim.  Now in that particular instance, they had a full appraisal of the home and accepted the price and major terms of the sale -- the only big problem they had was with the commission.  He categorized their position as “not negotiable” where there was only one agent on the file.  Another negotiator freely admitted that the commission I negotiated with the seller would be paid in full if two agents were on the file. Wow.

 

 

My problem with their stance is that my state (California) has not outlawed dual agency / dual representation, and I really don’t think Bank of America should be in charge of that decision.  And of course, since they are so large (in fact “too big to fail”) the policy decisions they make are beginning to have de facto legislative effect on the real estate market.  By discouraging dual agency to the point where it is not economically feasible for a smaller or one person brokerage to do it, they are in effect restricting the kind of services I can provide to clients in distress.  And, I feel it interjects Bank of America too far into my client relationships.

 

 

 

Further, I find their policy, dare I say it … hypocritical.  In my area MLS, agents are required to disclose whether they have a “variable rate” of compensation for dual agency, i.e., if you are going to discount your commission when you represent both sides, other agents must have notice of that fact.  I have seen no such disclosure on the many REOs that are listed by Bank of America REO agents.  So, apparently dual agency is not as “problematic” when Bank of America wants to get their own listings sold quickly and off their books.  Wow.  

 

At the close of my discussion with this particular negotiator, he did try the old  “investor guidelines” routine.  However, because I have run this issue up the chain in Bank of America before, I feel confident in saying that this is coming from Bank of America.  And, I think it is a dangerous and disruptive policy that does further harm to homeowners in financial distress in California and in other states where dual agency / dual represenation is allowable.  The irony for me personally is that bank/servicer inefficiency actually inspired my own decision to begin doing dual agency / dual representation.  My question now is --  what will Bank of America do next?

 

 

And haven’t they done enough already?

 

Tni LeBlanc is an independent Real Estate Broker, Attorney, Short Sale Agent, Certified HAFA Specialist (CHS), and Certified Distressed Property Expert (CDPE) serving the Santa Maria, Orcutt and Five Cities area of the Central Coast of California.

 

* Nothing in this article is intended to solicit listings currently under contract with another broker.  This article offers no legal or tax advice and is for information purposes only.  Those considering a short sale are advised to consult with their own attorney for legal advice, and their tax professional for tax advice prior to entering into a short sale listing agreement.  Mint Properties is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.

 

Copyright © 2011 Tni LeBlanc *Bank of America’s Bogus War Against Short Sale Dual Agency*

Posted by

Tni LeBlanc, Broker
(805) 878-9879 mobile/text

tni@mintprop.com
www.MintProp.com
CalBRE #01871795

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Richie Alan Naggar 07/21/2011 01:35 PM
  2. Gene Riemenschneider 07/25/2011 06:36 AM
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Rainmaker
908,388
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

Tni, I really think America needs to boycott Bank of America, from all sides.

Consumers need to: take their money out of their account and put it elsewhere; close their credit cards with BoA; do not use Bank of America for a home mortgage; if a home owner is struggling to make mortgage payments, do not apply for a loan modification (you'll just waste your time anyway as BoA will not modify loans), do not apply for a short sale, and most of all, do not buy Bank of America bank-owned foreclosures.  

Agents need to: step up and stop pandering to Bank of America's bullcrap. Do not list Bank of America short sales, and for sure do not list Bank of America REO's. Do not help buyers buy a BoA short sale or foreclosure. If consumers and agents/brokers across America did this Bank of America would change their tune in a heartbeat. I've been told by many real estate pro's, attorneys, etc. that Bank of America is incompetent. Bull$&^T!! They want to appear they are incompetent so we all will feel sorry for them and continue to take it. jmho

 

Jul 24, 2011 08:36 AM #34
Rainmaker
414,607
Tni LeBlanc, Realtor®, J.D.
Mint Properties, Lic. #01871795 - Santa Maria, CA
Tenacious Tni (805) 878-9879

Pam - I am so with you on that.  I am at the point that when people pull out a Bank of America Visa card I get a little ticked off.  It's starting to feel like politics -- LOL.  I don't send people into BofA for loans purposely.  Our local office makes that decision easy because all I have are nightmare stories about how they have processed loans in the past to back me up. However, beyond that look at how they treat their clients who are in financial distress.  Shouldn't that matter in the beginning while you are selecting a lender?  Their loan may end up in the hands of BofA, but it doesn't mean I have to walk them through the door.  And, I don't think I should either. 

I hear agents rant about BofA but rarely do I hear them talk about boycotting them due to their policies.  And, I think it is a legitimate thing to do.  Using their bully tactics to make things more difficult for solo brokers -- or encouraging other willing agents to play fast and loose with agency in order to be paid is wrong.  I refuse.

Jul 24, 2011 09:01 AM #35
Rainmaker
1,534,836
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg IL Real Estate

BofA = problematic. Hypocrites. This has to be against some type of law here DOJ? Why can they dictate something that is legal in your state?

Jul 24, 2011 09:35 AM #36
Rainmaker
908,388
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

Tni, I am 100% in agreement with you. If we start compromising our integrity so we can get paid what we are supposed to in the first place is unethical and bad for business. Like you, I want to be able to sleep at night and look at myself in the mirror in the morning knowing what I'm doing is right.

@Lyn has a good point. BoA is probably breaking a real estate law (it's not like they haven't broken laws before - LOL). The other law they are probably breaking (which has become another peeve of mine) is threatening investor buyers of BoA short sales what they can and cannot do (who they can and cannot rent to) with the property after coe.  There's got to be laws about that! Yet they don't care and pretend on their merry way that they are right and the rest of us are wrong. 

I agree, too, if they treat their customers this way at the get go of getting a mortgage loan, just think of what they'll do later if there is a problem. I've heard horror stories where BoA customers pay their mortgage and BoA insists they didn't pay. If a buyer I'm working with really wants to get their mortgage loan at BoA, ok, but they can't say I didn't warn them. There are many other places to go to get a mortgage loan with great rates and terms, and better treatment! 

The unfortunate part in all this is, BoA may end up owning their loan in the end. That's why something needs to be done about these banking bullies! I'm sticking with my story: Boycott Bank of America!

Jul 24, 2011 10:19 AM #37
Rainmaker
127,962
Wendy Cutrufelli
Alain Pinel Realtors - Walnut Creek, CA
Contra Costa Realtor

Tni,

Slight segue on the topic but did they also hit you with their new "Agent has a fiduciary responsibility to the bank" form?  I'm breathlessly waiting to read your blog on THAT topic.

Jul 24, 2011 12:31 PM #38
Ambassador
1,549,863
Karen Fiddler, Broker/Owner
Karen Parsons-Fiddler, Broker 949-510-2395 - Mission Viejo, CA
Orange County & Lake Arrowhead, CA (949)510-2395

None of their business....especially if there are two different agents involved. Sheesh..I often handle the buyer and seller on a short sale, it makes it so much easier and both sides can feel comfortable.

Jul 24, 2011 02:13 PM #39
Rainmaker
886,050
J. Philip Faranda
J. Philip Faranda (J. Philip R.E. LLC) Westchester County NY - Briarcliff Manor, NY
Broker-Owner

I don't have much to add to BOA's suckitude on this, but I am curious- if you double end a listing is it automatically dual agency? Because I do the client/customer thing. I explain to the buyer that I work for the seller and what their options are. It works for me. 

Jul 24, 2011 03:33 PM #40
Rainer
158,808
Adam Mallory
eBroker Real Estate 619-566-ADAM - San Diego, CA
Broker, ABR, e-Pro

Excellent post Tni!  Here's a thought for BofA: Try processing/approving a Short Sale in less than 60 days.  Manage to do that and THEN you can start making demands regarding Agency. 

Jul 24, 2011 08:39 PM #41
Ambassador
759,137
Charita Cadenhead
Keller Williams Realty - Birmingham, AL
Serving Jefferson and Shelby Counties (Alabama)

Everyone wants to stomp all over our commissions and determine our worth at will.  Given that BoA is not the seller, they have far too much power to make that call.  I'm with you.  We have to do everything possible toprotect our commission and be prepared to fight for this injustice.  We said banks were not in the real estate business?  You could have fooled me.

Jul 25, 2011 01:35 AM #42
Rainmaker
414,607
Tni LeBlanc, Realtor®, J.D.
Mint Properties, Lic. #01871795 - Santa Maria, CA
Tenacious Tni (805) 878-9879

Lyn - I've already written to a couple agencies about it and I'm waiting to hear a response.  I think it is problematic given how much of the market BofA has and the fact that it will obviously affect a smaller or one person brokerage more and essentially crush them.  I don't see why they should be allowed to have such a national policy.

Pam - Yes, if everyone just gets on board and starts "playing the game" I think the real issue is lost.  I'm not playing this BofA game.  Interesting that you bring that up about re-selling, I was just asked to have my clients re-sign the BofA contract addendum on a file because their legal department had made a "revision."  The only major change I saw was that they removed verbiage about not re-selling the property within 90 days of sale -- now it is back to the 30 day prohibition.  Bank of America sure thinks a lot of itself.  If they think the deal is unfair -- reject it.  Or better yet, take the property back and sell it yourself as an REO.  What they want is the right to continue to make infinite mistakes and be covered. No one is supposed to make any money except BofA.

Wendy - Didn't Wells have something similar too?  I do modify these bank forms when I see fit.  It's atrocious some of the things they come up with.  How about just getting a real valuation of the asset and stop trying to make me (the listing agent) your agent too -- especially since you don't even want to pay me!

Karen - Well they backed off of banning dual agency entirely -- but they had done that in one version of their addendum.  Now their war is centered on one agent transactions.  But, their sluggishness makes it all the more beneficial to have one agent on some files.  How does creating a disincentive for the listing agent to sell their listing benefit the investor?

Jul 25, 2011 05:21 AM #43
Rainmaker
414,607
Tni LeBlanc, Realtor®, J.D.
Mint Properties, Lic. #01871795 - Santa Maria, CA
Tenacious Tni (805) 878-9879

Phil - That may be a difficult nuance to run by in Equator.  I would be interested in knowing if someone was able to defeat their objection with that arrangement.  Have you done a BofA short sale that way?  I think that is a good idea.

Adam - I agree.  Start processing them quickly and then let's talk.

Charita - I agree.  Agents are patting themselves on the back for keeping banks out of the real estate game.  But they are in it full force and it looks like they will be controlling a large segment of it in my area for the next 5 - 10 years.

 

Jul 25, 2011 05:27 AM #44
Rainmaker
1,431,210
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

Great post.  I have a BofA Short Sale right now.  Did not plan to double end it, but not sure if I would even try at this point.

Jul 25, 2011 06:33 AM #45
Rainmaker
723,329
Wayne Johnson
Coldwell Banker D'Ann Harper REALTORS® - San Antonio, TX
San Antonio REALTOR, San Antonio Homes For Sale

Tni-Outstanding analysis and the comments have really added to the discussion.

Jul 25, 2011 05:53 PM #46
Rainer
478,183
Not a real person
San Diego, CA

Bank of America lost my business back in 1999, and nothing they have done in the ensuing years has convinced me that they deserve any of my business.

Happy Hump Day!

Jul 26, 2011 07:07 PM #47
Ambassador
2,677,925
Katerina Gasset
Get It Done For Me Virtual Services - Wellington, FL
Get It Done For Me Virtual Services

Excellent post Tni. Your expert advice and opinion as Santa Maria Short Sale Agents on today's real estate issues will help enlighten many homebuyers and sellers in your area. Keep up the good work!

Jul 27, 2011 02:19 AM #48
Rainer
230,727
Bob Hertzog
Summit Home Consultants - Phoenix, AZ
Designated Broker

I agree.. homeowners and buyers in your area will find your posts very informative and sharing your expert opinion as an Santa Maria Short Sale Agents will make it easier for them to understand the different issues of the real estate world. Great post Tni!

Jul 27, 2011 06:09 PM #49
Rainmaker
414,607
Tni LeBlanc, Realtor®, J.D.
Mint Properties, Lic. #01871795 - Santa Maria, CA
Tenacious Tni (805) 878-9879

Gene - Well BofA has definitely taken the position that they want it to not be worth your time and liability.  I guess they'd rather have their listings languish.  I wonder if that is in BofA's interest or in the investor's interest?  I believe they receive servicing fees all the while.

Thanks for stopping by Wayne and I agree the comments from others have been great.

Hi Russel - I'd love to know what they did to lose your business. Even before this whole housing meltdown they also lost my business due to their treatment of my grandmother who had been a 30+ year customer.

Thanks Nestor and Katerina!

Thanks Bob - Glad you enjoyed the post.

 

Jul 27, 2011 10:49 PM #50
Rainmaker
749,948
Jackie Connelly-Fornuff
Douglas Elliman Real Estate in Babylon NY - Babylon, NY
"Moving at The Speed of YOU!"

Hi Tni, BofA is just unreal! When they see one agent that is getting the entire commission, that is when they want to cut it the most. In NY, it is illegal to intefere in a contract and BofA doesn't care. I have a short sale with BofA that has a buyer and when I got another offer, BofA told me that I would have to take it as a back-up offer since Equator can't handle more than 1 offer at a time and was told that the investor can't handle more than 1 file at a time. To cover my butt, I got an email from BofA stating such. These banks have too much control thanks to the bailout. Too BIG to fail.

Jul 27, 2011 11:06 PM #51
Rainmaker
414,607
Tni LeBlanc, Realtor®, J.D.
Mint Properties, Lic. #01871795 - Santa Maria, CA
Tenacious Tni (805) 878-9879

Jackie - You are so right --  they do have too much control of our industry and they are ruining it in areas that have a great deal of distressed inventory.

Jul 30, 2011 05:00 PM #52
Rainmaker
736,380
Pete Xavier
Investments to Luxury - Pacific Palisades, CA
Outstanding Agent Referrals-Nationwide

Hope things got better in the past 18 months with B of A's problem of agents doing a great job.

Nov 07, 2012 03:12 PM #53
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