I am almost 6 months into a short sale with a Chase first (balance owed is $562K) and a second with First Tech (who has been awesome). I had been working with an offer of $470K for about 3 months when I received notice about 6 weeks ago that the investor (who we learned is B of A) required a net of $480K. I put the property back on the market and got them a purchase price of $520K with a net to the investor of $489K. About a week ago they insisted we include the HAFA incentive on the HUD when we were not pursuing HAFA (and at the same time they were reducing agent commissions). None of this made any sense. We submitted the revised HUD and they almost immediately turned us down for HAFA (go figure). The short sale was then transferred to the traditional short sale department where the short sale was declined. I spoke to the negotiator this morning who said the investor now wants a net of $525,000. The sellers have $100K in a retirement account, and I am guessing they are going to try to see if the sellers will kick in money, which they won't.

The market will not support this price. I asked who else I could talk to, and I was told by the Chase negotiator that if I tried to contact the investor they would blackball me for any future transactions. Apparently I am not supposed to know who the investor is.

The sellers are prepared to let the house go to foreclosure, and will then file bankruptcy. How and with whom should I pull out this card for leverage? It is ridiculous for them to not accept this amount because they will not get it as an REO, and will not be able to pursue after BK.

Any advice would be very much appreciated. Thanks in advance.