Replies to This Discussion

Permalink Reply by Jason OBrien on October 7, 2012 at 2:56pm

Hi Karla,

I am also in California and have had something similar lately with loan mods but none of my sellers believed the loan mod offer.  Just last week, after submitting a complete short sale offer and package to Homeward, they called my sellers directly ad asked if they would like to try for a loan modification instead. This is a week after getting an in-house denial and a previous HAMP denial earlier in the year.  

 Some lenders I believe are continuing to run files though three different departments without any cross-contact or info sharing. Loss mitigation, i.e. loan mod, short sale and foreclosure are all running independently of each other causing this issue in my opinion.

I currently have two SS with Indymac and one with Suntrust and the loss mitigation negotiator in these transactions remained the same throughout the file. From loan modification to short sale, no transfer of negotiator or department.

Not sure if this is the same for other lenders, just my experience.

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Permalink Reply by Kevin - Greenville, SC on October 7, 2012 at 8:33pm

Yes this is happening more and more now.  It's has largely to do with the recent settlement agreement.

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Permalink Reply by Kevin - Greenville, SC on October 7, 2012 at 8:35pm

'nothing has changed on their situation that would prompt the bank to think that they may qualify this time...The bank is giving false hopes to these sellers...' - Not necessarily true.  Many things have changed under the AG Mortgage Settlement.

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Permalink Reply by KARLA ELKEBIR on October 8, 2012 at 2:53am

Hi Kevin,
Nothing has changed with the sellers situation... They were turned down for a loan mod almost 2mos prior to SS. I understand that there are many programs, but these people were denied once again. They had an approved SS with BofA and 2nd lien holder, received notice from the bank that they should loan mod instead, just short of two weeks from closing on the SS. The sellers cancelled everything, they were denied once again for a loan mod, and unfortunately, their house was foreclosed on... That's what I'm talking about! We're seeing this happening with BofA recently. Thanks for your opinion.

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Permalink Reply by Brett M. Swenson on October 8, 2012 at 6:27am

Hello Everyone, 

This happens more than you would think. We've been doing Short Sales & Modifications since 2007 here in CA and we have seen this for years. This is usually the case of the left hand not knowing what the right hand is doing. These are mass retention efforts on the bank's part, clients get confused thinking it is an official offer and its not. Ask your clients, how can the bank offer you a modification if they haven't reviewed your documents? It's impossible for anyone in the Home Retention Department to see any of the financial information they've submitted for the short sale. These docs are imaged into a completely different system and no other departments can view them. In fact some banks have now made it so only your account manager can view your documents. Modification packages require different items and the average review times are now more than twice the average review for a short sale. 

You may see increased activity from BofA due to the DOJ settlement, yes. This is because informal reports have come out stating that BofA hasn't even come near to the relief they were to provide through the settlement by now. But what we've seen being done most to make up for this is an offer to wipe away your BofA Junior Liens. The sad thing about this left hand right hand thing is that it can cause more foreclosures if the client takes it serious. They bail out of the short sale and chase after the mod, get too far into arrears and stall out the sale date even further. So, then they try to attempt the short sale process again where the investor may view it as a stall tactic and is less likely to postpone a sale date.  

Brett M. Swenson

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