Who has seen the Short Sale Submission Procedures from Chase, Bank of America, Wells Fargo, US Bank, really name any bank, in writing? It's like the Loch Ness monster and Bigfoot, only worse. At least there are rumors that the Loch Ness monster and Bigfoot exist.
I wholeheartedly believe that they make it up on every single transaction. It is designed so that we cannot possibly get them everything they want the first time. I've had to start one over recently and lost one to foreclosure. None of these banks have compensated me for any of my time.
The one I lost to foreclosure was because I didn't have the escrow receipt for the earnest money deposit on an unapproved short sale. There are two sides to that argument. One says make the buyer deposit to escrow to show they have skin in the game. The other says the seller may be unresponsive if they lose the house and getting that deposit back could be a monumental pain in the behind. Regardless, that's the stupid piece of paper I could not provide which resulted in Bank of America not stopping the Trustee's Sale. I thought that was so egregious that I spent the time writing my client's Congressman on his behalf.
I've started another one over completely because I didn't provide them the exact trust document they wanted. Title of the home is being held in a trust. They asked for the trust. The client gave me a copy of the abstract of trust. In my previous career as a title officer, that would not be enough, but since we are in the state of California, a third party, such as me, the title company or the bank is protected.
Cal. Prob. Code 18100.5
(a)The trustee may present a certification of trust to any person in lieu of providing a copy of the trust instrument to establish the existence or terms of the trust. A certification of trust may be executed by the trustee voluntarily or at the request of the person with whom the trustee is dealing.
And section (f)
(f)A person who acts in reliance upon a certification of trust without actual knowledge that the representations contained therein are incorrect is not liable to any person for so acting. A person who does not have actual knowledge that the facts contained in the certification of trust are incorrect may assume without inquiry the existence of the facts contained in the certification of trust. Actual knowledge shall not be inferred solely from the fact that a copy of all or part of the trust instrument is held by the person relying upon the trust certification. Any transaction, and any lien created thereby, entered into by the trustee and a person acting in reliance upon a certification of trust shall be enforceable against the trust assets. However, if the person has actual knowledge that the trustee is acting outside the scope of the trust, then the transaction is not enforceable against the trust assets. Nothing contained herein shall limit the rights of the beneficiaries of the trust against the trustee.
My seller provided the abstract of trust expecting to be asked for a trust certificate in accordance with California law. But noooo! Wells Fargo wanted the entire trust. His trust is in a binder. It was written by one of those cheapo law services, not a real Estate lawyer. Many of the sections are blank. His personal scanner won't handle all of the documents. I asked him to go down to his local branch of the title company who was handling the escrow and have it scanned in. He got there and they gave him a bad time about the size of his trust and told him he only needed Section Two. They scanned in Section Two, I sent it to the lender and they rejected it. The next day I drove 30 miles out to his home, got the whole trust, scanned the whole thing in and emailed all 25mgs of it to Wells Fargo. They said I was a day late and made me start the short sale all over again!
Now, I'm not an idiot. There are certain things that every short sale needs and I go get them at the onset, bank statements, 1040's, 4506-T, hardship letter, that stuff makes sense, but some lenders you have to wait for them to send the package with their RMA in it to the client to know what else they need, some won't send the package until you have an offer and some take a look at what you send them and then make up a couple of more things as stall tactics. The worst part of it, is how stupid it makes us as professionals look. "Why didn't you ask for this originally?" Because the lender didn't tell me they wanted it.
Now I get the basic stuff and tell my clients that the lender is going to have an escalating list of idiotic requests that we just need to provide, there is no where that we can go and get a list of what they want and there is no rhyme or reason as to what it's going to be. And yes, that's the best I can do with this process. The one I like the best is after my client filled out a RMA for Bank of America and signed it and provided all of his documentation, they would not proceed until he picked up the phone and called them and told them that he wanted a short sale. Who in their right mind would fill out all of that paperwork if they didn't want a short sale?
Everybody talks about less government involvement. I'm all for that myself, but it doesn't work without personal reponsibility. The banks need to take responsibility for this mess, streamline it and be transparent about it. Put it up on your website and let your borrowers, my sellers download the documents they need. Let them download a comprehensive list of what you want from them from the onset and move these properties through the system. That's how you avoid the politicians mucking about trying to fix something that's broken, you pull up your big boy pants and fix it yourself.
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