Sometimes doing a short sale comes with additional challenges. The borrower needs to get relief from the deficiency in many cases in order to get the full advantage of the short sale. When the bank plays hard ball, the borrower loses and so does the bank.
Bank of America short sales and their endless runarounds and contradictions have left a bad taste in my mouth for this banking and lending institution. Two years ago, my largest short sale problem was Countrywide. Countrywide would take many months to review files and just when you were getting ready to dig your own grave, the approval would come through. That wasn't the end. Just because Countrywide approved your short sale, didn't mean squat. I had an approved file closed for not sending in a form that Countrywide never asked us for. That was dealing with Countrywide.
Well, when a seemingly good bank (Bank of America), swallows a large problem whole (Countrywide), you know the outcome. The problem remains, but under a different name. Bank of America.
I had been working on a short sale with Countrywide/Bank of America for well over a year. It was a divorce. The first contract we sent at the beginning of the listing, was denied in one month. Why? Not enough money. It was the the highest offer we would ever see on the property in question.
The second offer came about six months later. Was with Countrywide/Bank of America for three to four months. Lower offer, but the writing was on the wall. The local market was in decline. The neighborhood where the property was located was in a steeper decline. Those months it took to accept the offer came back to haunt Countrywide/Bank of America when the buyer's appraisal came in. It was nearly $20K off the accepted sales price. Countrywide/Bank of America refused to accept the appraised value and my sellers were forced to kick that buyer to the curb.
Put the property back on the market, not expecting what we really needed. A cash buyer willing to overpay for the home and forgo their own appraisal. My short sale prayers were answered when that third offer came in. My sellers sent it in. It was the amount that Countrywide/Bank of America has refused to move down from in our second scenario AND, there was no seller subsidy as there had been in that second scenario.
Despite what should have been flagged as a slam dunk, Bank of America (no longer calling the monkey on its back Countrywide) took four months to get back to us on this deal. The deal was accepted BUT, the approval letter wa not the same approval letter as Countrywide had sent before. This one left my sellers wide open to collections in the future for the shortfall of the mortgage payoff.
We asked Bank of America to remove that wording. After all, they had received MEGA money from the U.S. Government to help them cover such shortfalls. Seemed qutie greedy of them to take from the government and then threaten to take that same shortfall amount from my sellers. The loan would be repaid and then some.
When Bank of America refused to changed their short sale approval letter and remove the collections language, my sellers declared bankruptcy and told Bank of America to shove it. My sellers refused to move forward with the short sale, and who can blame them? Now Bank of America has paid the attorney's fees to foreclose (estimated at a low end of $40K in my state) and will continue to face the same or worse market conditions. Not a good business move, but that's Bank of America for you. Wasting America's money!
Chris Ann Cleland, Realtor- Licensed in Virginia, GRI & Short Sale Specialist. Affiliated with Long & Foster, 7526 Limestone Drive, Gainesville, VA 20155. To contact Chris Ann, call 703-402-0037 or email chrisann@LNF.com.
Ron Margolis, RA, CDPE, ABR Hawaii Life Real Estate Services 808.346.7095 email: email@example.com