Bank of America Short Sale Negotiator update

By
Real Estate Agent with Keller Williams Realty
http://actvra.in/hC

Finally, some honesty! I just had a great conversation with a negotiator from Bank of America for one of my short sales. The good news is that the short sale was approved. The bad news is that Bank of America's approval letter provides for them to pursue a deficiency judgement for the difference.

This loan was a "purchase money", "non-recourse" loan in the state of California. That means that the only recourse the bank has is to foreclose on the property. So, the upshot here is that if the owners sign that short sale approval letter they then become liable for the difference.

Of course, no responsible real estate agent would allow their client to sign a letter as such without attorney review. And, of course, no attorney would advise their client to sign that letter because it makes the future consequences worse than foreclosure.

The negotiator at Bank of America says there is no way to change the letter to a "non-recourse" approval. He says that Bank of America requires this language on all short sale approvals. He also suggested that I give any future Bank of America short sale clients a copy of the recourse approval letter in advance so they can agree or disagree to that language in advance.

The negotiator and I talked a bit about how this was a complete waste of time for everyone involved. He actually seemed sympathetic.

My clients are now considering bankruptcy and I will likely not be accepting Bank of America short sale clients until things change.

What a pity for everyone.

Oh- in case you think they won't come after your client- just let that go. Bank of America will likely sell off that right to pursue  for the deficiency to someone who will wait in stealth for just the right moment to go after those sellers- I think they have 4 years to do so. At least here in California.

 

 

 

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Rainer
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Daphne Peterson
Keller Williams Realty - Santa Rosa, CA
Daphne Peterson

Hi Jerry,

I feel your pain. I don't quite understand why Bank of America is having such trouble keeping current with their short sales. I guess they are just overwhelmed. Other Banks are making better progress- like Wachovia, Wells Fargo and Chase. I think that treating their customers like this (meaning a total lack of service), especially during one of the most stressful times of their life, is just not a good business practice. 

Equator is also a complication. Because it requires internal actions that do not always get performed in a timely way.

Please make sure you talk with an attorney/bankruptcy attorney before you accept the terms of any short sale! 

Good luck with it all!

Daphne

May 11, 2010 09:39 PM #24
Anonymous
Anonymous
Cynthia Wensinger

Well here is an update that  is more positive but has made me a negotiator in the truest sense.  i have taken to calling BOA, BSOA.  Not very nice but neither are they.  I just got my first BOA approved with no deficiency judgement, 1st and a 2nd  with BOA.  Now this and it seems to be what is working with them which is slimy and not the way I would normally do business but seems to be their way.  My client lost a 125k per year job, his step son died 2 weeks later then his brother had a stoke and passed in the next 10 weeks. (since he did hget a seveerance pkg BOA requirted a $1000 cash contribution.    Essentially I offer a free press conference with every short sale.  I am quite frankly tired of the big bank taking money from the govt and then being unwilling until their arm is twisted to partcipate in HAFA.  which by the way Fannie and Freddie are not partcipating in. 

Next one is my buyer, just approved after 6.5 months sitting on equator.  Seller getting out without a deficiency.  first buyer offered 65K boa countered 80k,(comps at 83K).  buyer walked(mother of 2nd buyer) 2nd buyer offers 83K asks for 4k in cc.  BOA counters 88K.  took 6 weeks to negotiate including getting an appraisal to support our offer.  still they stuck to 88k...Finally unfortunately 1st buyer had lung cancer and had a lung removed this weekend.  (doing fine home already!) 

Finally after no one answering us for 2 weeks, I sent a scathing e-mail(planned with the sellers agent) to her . telling her to let BSOA I would be happy to take my single mom firtstime home buyer with a mother dying of cancer on a s adog an pony show and show them that they really could do better than what they were doing 3 days and an approval with a reduction to 5% commision and lest 1500 in cc.  Did we win yep....    and yes it can be done without a defieciency jusdgement you just better make that hardship stick HARD!  CAW

May 11, 2010 10:37 PM #25
Rainer
22,480
Daphne Peterson
Keller Williams Realty - Santa Rosa, CA
Daphne Peterson

Congratulations on sticking it out, Cynthia!  I'm glad there was a good outcome. 

When I did my first short sale a few years ago, it just seemed to make so much sense for everyone. I just have never seen the logic in not providing the resources to make short sales happen faster. It could have potentially saved billions of dollars in losses to everyone.

Keep up the great work for your clients!

Daphne

 

 

May 11, 2010 11:39 PM #26
Anonymous
Anonymous
Anne

I was and still am the only one who made an offer on a short sale property. Seller accepted my offer immediately March 8.  BOA accepted my offer shortly after. I have even agreed to pay a lien the seller has for the leased land.  A negotiator was assigned quickly. Sellers have moved out of the house, have signed the necessary documents, but here it is, almost three months later, and escrow has yet to close.  I am paying cash for this house.  How can I find out who the negotiator assigned to this short sale and is it alright to contact he/she or best to have my realtor do it.   I am in a situation where I don't have months to wait for escrow to close and would like to get info from the negoitator directly.  Thank you for your response. 

Jun 01, 2010 07:20 PM #27
Rainer
22,480
Daphne Peterson
Keller Williams Realty - Santa Rosa, CA
Daphne Peterson

Hi Anne,

Generally speaking, your agent should be in contact with the seller's agent who is in contact with the bank. Sometimes agents use a 3rd party company to negotiate the short sale. It would be good to know who is in charge of the negotiations.

The only people who BOA will speak with are: the seller(s) and anyone the seller has specifically authorized in writing to speak to their lender. So, there is likely not at good chance that you or your agent will get access to Bank of America. 

It sounds like this is a good time to sit down with your agent and review the whole transaction and what has transpired.  It may be that the seller accepted your offer, but BOA still has it under review as to whether/under what conditions they will accept a short sale. 

Bank of America has generally gone to using the Equator system. The seller's agent can at least tell you what "phase" you are in. Perhaps that might also be helpful.

Hope that helps somewhat!

Daphne

 

 

 

Jun 01, 2010 07:30 PM #28
Anonymous
Anonymous
Dkoza

I am a seller underwater who FINALLY got a BoA short sale approved and closed this week, with the removal of the deficiency judgment language.  Thank you to my wonderful realtor for stalking and bugging the negotiators and superiors for months.  This is CA...it was a $4 mil house when we bought it, we put 20% down, had plenty of income to cover it and then  dh company went down the tubes.  We continued paying for a year and a half, a few times we thought he had possibilities for a good paying job, had severence, etc.  Once severence stopped, we stopped, took what money we had left, paid cash for a small house.  We had an all cash offer for 2.5 (mortgage was 3.0).  BoA jerked around for so long, finally approved it but with the deficiency judgment.  We thought they probably wouldn't pursue it...how could they in CA?  But attorney advised against it.  They wanted another $85,000 for us to pay.  We had paid enough (dh still not working) and eating up all our savings the years we spent paying it, should've stopped a long time ago.  Anyway, my wonderful agent was able to get a buyer for 2.6 (albeit financed), and they removed the deficiency language and we closed yesterday!  So they WILL waive the language, but I would advise no one to sign it.

Jun 12, 2010 07:49 PM #29
Rainer
22,480
Daphne Peterson
Keller Williams Realty - Santa Rosa, CA
Daphne Peterson

What a saga!  I have heard that Bank of America is getting more realistic with regard to deficiency language on non-recourse loans. I am so happy for you and appreciate you sharing your news!! Congratulations to your agent and legal advisor, too.

Daphne

Jun 13, 2010 03:33 PM #30
Anonymous
Anonymous
decomo

I am a buyer in a shortsale situation.  I made an offer that is 55K over the list price.  My offer came in after the seller accepted a different offer and had that other offer submitted to the Equator system.  My understanding is that the other offer was a full price offer.  My question is:  how does the BoA negotiator know if there are higher offers sitting with the listing agent if the equator system only allow one offer to be submitted at a time?  How can the negotiator accept a lower offer if they don't know of the other higher offers?  Can the listing agent tell the negotiator that there is another higher offer other than the offer already submitted to Equator?  More generally, what do I need to do to at least get my offer to be seen by the negotiator?

Thanks.

Jun 27, 2010 12:37 PM #31
Rainer
22,480
Daphne Peterson
Keller Williams Realty - Santa Rosa, CA
Daphne Peterson

Hi Decomo,

I suggest you ask your agent to ask the seller's agent how the seller is dealing with "subsequent offers".  I don't know which state you are in, but in California, if you are using the California Association of Realtors forms, and more specifically, the Short Sale Addendum, there is language in that allows the seller to accept and present later offers to the lender.

That being said, your agent should still inquire as to what they did with your offer. Did they submit it to the lender? Did they put in back-up position (you would have signed paperwork for that) or did they just file your offer for later reference.

Your agent will be able to give you the scoop on what happened!

Warm Regards,

Daphne

 

 

 

Jun 27, 2010 11:26 PM #32
Anonymous
Anonymous
decomo

Thanks for the info.  I am in California and did not sign a backup paper.  Regarding the short sale addendum, even if the seller can present the later offer to the lender (BoA and Equator system), we were told by the listing agent that the Equator system can only accept one offer at a time.  I am confused.  Since you seem to be familiar with the Equator short sale system, please let if me know if the seller can present the later offer to BoA with the Equator system.

Jun 28, 2010 02:14 AM #33
Anonymous
Anonymous
Eneida

I am currently encountering this problem with BofA:

After having received the approval letter which included a promissory note, is that they will only give the 2nd lien holder $3,000, no more.  I exhausted my resources and now the other agent and myself have no option but to drastically reduce our commission even more, or we lose the deal.

In my past experience with BofA tables turned and they were the 2nd lien holder, they would not provide an approval unless the received 10%.

Now that the other agent, myself, and the buyer are trying to satisfy the second lien holder, BofA is telling me that I have to start the "equator process all over again", due to the investor declining to contribute further. They closed our transaction completely, with an approval on hand, only because they received a request to help us contribute.

I don't understand why we have to start all over again if we have an accepted approval, which was received just a few weeks ago, and none of the terms have changed.  All this process has taken 7 months as it is!

After 5 consecutive days of sending messages on equator/voice mail, the negotiator is being unresponsive.

Any suggestions? Apreciated.

Nei ;(



Jul 05, 2010 08:19 PM #34
Anonymous
Anonymous
Cynthia Wensinger

Actually had a very interesting talk with a VP of home loans and I believe now that Bof A understands that this is hurting their long term lending business with Realtors who used to be their cheerleaders for people of good credit.  I presented several scenarios with him as to the issues with Bof A and the equator system and responsiveness, again the answer from him and me was to escalate....just because the answer is not what the (negotiator is the wrong term) person being paid $8 an hour wants to tell you, you must escalate it.  One thing that they are very afraid of is lawsuits and I would encourage you to find an atty that has experience with them and short sales.  if it can be proven that the investor foreclosed when a better dollar deal was available via a short sale they may be held liable and so may you!One reason I now have an atty  offered on every deal so that they decline I am off the hook for any malpractice on my part.  One thing that works with the seconds is that they have to understand your client is willing to go to forclosure and they will get 0 and 3K is better than0.  but alos can your client offer a promissory for 10% to the second and still get a release I bet so.

Cynthia Wensinger Cozy Homes Real Estate

Jul 05, 2010 09:33 PM #35
Rainer
22,480
Daphne Peterson
Keller Williams Realty - Santa Rosa, CA
Daphne Peterson

Hi Nei,

Cynthia is right. You need to escalate this and speak with a supervisor or two! You might as well hang in there for a bit longer.  Make sure you recommend to your client to get any short sale approval letters reviewed by their attorney before they proceed!

Daphne

 

Hi Cynthia,

I'm glad to hear that you spoke to someone at Bank of America about what PR nightmare their bank is in the midst of.  I know that if Bank of America realized how many former customers feel they have been treated badly by them and are likely telling their friends, they might think twice about improving their processes.

Daphne

Jul 05, 2010 10:11 PM #36
Anonymous
Anonymous
Eneida

Thank you very much Daphne & Cynthia,

I am on the phone with BofA trying to escalate the file.

So happy I found this blog.

Best,

Nei

Jul 06, 2010 12:12 PM #37
Rainer
22,480
Daphne Peterson
Keller Williams Realty - Santa Rosa, CA
Daphne Peterson

Hi Enieda,

Good luck with your escalation! Please feel free to post your results here on your progress!

Daphne

Jul 06, 2010 12:24 PM #38
Anonymous
Anonymous
David

I am purchasing a KAtrina Damaged home outside New Orleans through a short sale.  My seller was the Deficiency Judgement clause removed.  Someone at BOA told my agent there is a way for the seller "buy out" that clause with cash.  Do you know what percentage of the remaining money would be required for this buyout? 

He purchase the home 2 years before Katrina for approx 170K and I have agreed to pay 75K, as the home is still gutted to the bare studs on the first floor. I am assuming he may still owe about  90K.

It seems most people are having the same trouble getting in touch with the negotiators.  I am an enlisted soldier leaving for Afghanistan for a year in MArch and need to complete the purchase and have the house repaired for my family before I leave.  We have been emailing and calling, but are having trouble getting a resonse. 

Any advice on this would be appreciated.

Oct 19, 2010 12:41 PM #39
Rainer
22,480
Daphne Peterson
Keller Williams Realty - Santa Rosa, CA
Daphne Peterson

Hi David,

I wish I could say there was a definite answer. A lot depends on the investor who owns the loan. Hopefully, your agent is skilled at dealing with the banks regarding this type of situation. If the agent is not, perhaps their is another agent in their office or elsewhere that can work as your advocate on this.

Good Luck and I wish you a safe tour in Afgahanistan.

Daphne

Oct 21, 2010 02:41 PM #40
Anonymous
Anonymous
Dawna

I am a seller on a short sale with BOA.  It has been a paperwork, documentation, negotiating nightmare.  We are going on 2 full years since our process started.  3 different buyers because BOA takes so long, they got tired of waiting and walked, We finally thought we were getting close - had negotiated getting the deficiency waiver and us signing a $6000 promissary note at close - only sticking point was negotiating the amount that BOA would give to the second mortgage.  NOW after 7 months with this final buyer, and AFTER they agreed to the promissary note, they are now coming back saying they want cash at the table- BOA abslolutley does not deal in good faith- we are done with this process!  They can foreclose, I will live in the house rent free for a one year redemption period ( Michigan law) and then we will file bankruptcy to get rid of the debt.  What I dont understand is, they have had 3 willing buyers - instead, I have lived there for 2 years making no house payments, they have postponed the foreclosure sale several times and now they have to wait another year to actual take posession of the home.  I won't be moving out a day sooner!  Not sure whose making the decisions for BOA, but someone should make the higher ups aware of what is going on.  I know I'll be writing a lengthy letter!

Apr 08, 2011 03:37 PM #41
Anonymous
Anonymous
Laura Crabill

We are trying to purchase a short sale with BOA.  It has been 6 weeks since our offer and the equator system shows "hold" for the negotiator's status.  From what we are told, that means a negotiator has been assigned.  we are the THIRD potential buyer of the home.  The other 2 walked after it took so long to close.  We know BOA won't talk to us but I am told the seller's agent can't call them and can only communicate via email through the equator system? Is this true?  Seems like an agent can call and see where the negotiator is once one has been given our "file".  We are putting down 30% and willing to pay closing.  Seems like BOA still has a hard time working their short sales in TN.   Our lease is up in August and we really would like to close in June so we can get things done to the house.  It has been on the market for over 400 days and in short sale status for over 1 year.  Seems like they would want to get this one off their books by now. The owners have long moved out. 

May 05, 2011 10:51 PM #42
Anonymous
Anonymous
Dawna

Believe it or not...After our 3rd purchaser made an offer in Sept 2010 - BOA has agreed to the sale.  Instead of accepting a $6000 promissary note to waive the deficiency, they are accepting $100 cash. Go figure!  None of what BOA dogooseberryes makes any sense.  I am just glad to be getting out from under this mess and with a deficiency waiver from BOA and GreenTree both.  It has been a long, stressful 2 years.

May 06, 2011 09:51 AM #43
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Daphne Peterson

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