Bank of America/Countrywide "Forgets" to Ask for Promissory Note

Real Estate Broker Owner with Rulnick Realty, Inc.

We all make mistakes, but this was a big one, by a big corporation...  I was in negotiations for a short sale on a Crestview, Florida listing.  My sellers owed Countrywide/Bank of America about $175,000 as the senior lien and around $25,000 to Citi Financial as the junior lien.  The sale price was a spot-on $150,000.

Bank of America asked for a promissory note of $5000.  Although my sellers had recently divorced and had to move to separate homes, they both had stable jobs. Bank of America told me that was a factor in asking them for the note. The couple agreed, and I emailed the negotiator.  A few weeks later, BOFA approved the short sale.  YEA!  And they did not even ask for a note!

Bank of America Approval

My next problem was to tackle Citi, who had initially farmed out the listing to a collection agency, as I wrote about in "Rude and Crude- Nordon Collection Services".  After I complained about Nordon's uncouth behavior, and hanging up on me, Citi took the file back.  They requested $6000 as a pay-off to release their lien.  BOFA would only pay them $3000, so my sellers agreed to pay the other $3000 at closing, each having to borrow money to do so.

Finally, the home closed!  After months of wrangling, the sellers were thrilled to complete that phase of their lives.

Until yesterday, that is.  Bank of America called asking where the note was.  This is a month after closing.  They sent me back a copy of my own email to them stating the sellers would agree to a note (pretty shrewd, huh?) The negotiator then called me, demanding the note be paid.

I responded, incredulously."The note?" I said, "You did not require a note in your approval letter.  The sellers based their decision to borrow money to pay Citi on the fact that you did not require a note.  They have nothing more to give....  Is someone in trouble at your company?"

"Yes" he responded.

It's Wendy!

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Wendy Rulnick, Broker, CRP, CRS, GRI, ABR     Rulnick Realty, Inc.

Destin FL Real Estate

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Wendy Rulnick, Broker/Owner Rulnick Realty, Inc.

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Comments 17 New Comment

Sally K. & David L. Hanson
WI Realtors - Luxury - Short Sale - CDPE, REDS
Keller Williams 414-525-0563

The one we like as much is the famous Wells....we will release the lien, have the sellers agree to "work it out" out what rate...we don't go there without everything in writing...signed in "banker blood"...who agrees to what they don't know they are agreeing to....?  Good less sloppy mitigator on the fully employed lines !

June 10, 2009 06:40 AM
Bill Gassett
Metrowest Massachusetts Real Estate
RE/MAX Executive Realty

Wow that looks like a substantia error! Great to hear you got another one to the closing table Wendy:)

June 10, 2009 07:33 AM
Patrick Schutte
Prescott Premier Properties

Reminds me of a bank deal I did where I got the bank to agree to:

Seller to convey social membership at closing.

They agreed but were surprised when it turned out to be worth $14k to my buyer.

:) PS

June 11, 2009 04:48 PM
Virginia Hepp
Mesquite NV MLS - Sun City Mesquite - 55+ Buyer Re
ERA - Mesquite NV Homes For Sale

Wendy, I really like hearing your short sale success stories - this one really made me smile.

June 11, 2009 09:56 PM
Lois Davies
Cape Coral & SW Florida
Century 21 Birchwood Realty, Inc.

Great story Wendy.  One of my short sales is with the now Bank of America, it is my dauthters home and I hope they make the same mistake.  I am crossing my fingers..

Good for you!!

June 16, 2009 06:47 PM

Wendy Rulnick

Destin FL Real Estate
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Author Bio: Wendy Rulnick, Rulnick Realty, Real Estate Broker in Destin Florida and all surrounding towns

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