Has anyone been successful in getting BOFA to rescind/reverse a foreclosure while it was in short sale review?
I've had quite a few agents in town saying BOFA is foreclosing instead of doing the shorts and giving no forewarning.
Tags:
Amen!
Sam Purtle said:My two cents:
1. Something has to be done about this crap. Why are we helping out Bank of America by sending them short sale offers if they refuse to work in good faith? Over and over again it is the same story. Short Sale Demand Letter is received and it states specific terms which need to be completed in order to close the transaction. All terms met and closing at escrow occurs, monies are wired and then the property sells at auction. Or the alternative: short sale demand letter received and during the purchaser due dilligence period and before COE the property sells at auction although a postponement has been granted by the investor.
The solution to this mess is this - suspend the foreclosure auction until after the short sale demand letter timeline expires. pretty simple you would think.
The alternative solution is just to stop doing short sales with Bank of America and letting the million plus homeowners who are in default with them foreclose. They could save a tremendous amount of money by shutting down all of their short sale departments and breaking ties to Equator.com.
What I find humorous is their recent webinar where they are so upbeat and indicating that everything has changed, they are streamlining their processes, etc..... what a load of $$%$%@
Getting it rescinded AFTER the fact is very difficult, particularly if the ivnestor on the note is Fannie or Freddie, or, if there is mortgage insurance.
In some of these cases, they actually make LOTS more cashola foreclosing on the home (wouldn't it be GREAT to know that up front)...
This is a prime example of why it pays to pre-screen your Seller and the situation at hand....we cover this in our book....again, there ARE occaisions where it is in the Seller's best interest to let teh home go to foreclosure and compelte a strategic default....
Brigette -
FACT -- for some loans with Freddie Mac, they actually get almost $1.80 back for every dollar lost through foreclosure via TARP funds.....YEAH, our tax dollars hard at work!!!
I learned this through an "off the record" conversation I had with a VP at Freddie Mac in their Chicago office after escalating a file.....numbers were VERY clear, we had a great offer in and they REFUESD to stop a auction.
Being a TOTAL PAIN IN THE ______ (believe it or no I happen to be good at fighting for the Sellers and agents I work with, having gone through this same thing about 5 years ago), I kept calling and bugging people at Freddie until I learned the above. Obviously I was not happy about it, BUT, this stuff is much much much easier to take when you know why they make these seemingly foolish decisions.
Eample:
If Freddie Mac lost $100,000 of what they were owed via foreclosure, they actually are reimbursed as much as $180,000 through TARP funds once the property is sold as REO....how about them apples?
FACT - with loans that have mortgage insurance (MI), the investor gets whatever they can at foreclosure, PLUS any monies for which they are owed via insurance. I have been told the amount they receive is anywhere from 30% of their total loss to 110% of their total loss.
Let's do some math. In some cases, again, they make more money foreclosing:
Example:
$300,000 - the amount owed to the investor. Remember, this is the group that actually funded the loan (Fannie Mae, Freddie Mac, Brigitte Powell Pension Fund, etc.), NOT the Servicer, the company we deal with on short sales and who your Sellers write their checks to)
$200,000 - the short sale offer you got on a home worth $200,000 -- seems like a good offer and that they SHOULD accept it
Much to your surprise, your short sale gets declined and the investor takes back the property at foreclosure.
House sells as an REO four months later for $200,000 (yes, the exact same offer you had given them)
With MI, the investor would receive the $200,000 from the REO sale, PLUS, as an example, they would get 30% of the monies they lost on the note, or:
30% of their $100,000 lost = $30,000
NET to them would then be $200,000 from foreclosure, PLUS, the $30,000 they get from the MI.......$230,000 in total
Again, with cases like the above, you are almost doomed from the get go......if you can get these detailed numbers when you first begin the short sale process, you can save yourself LOTS of time and hassle.....
The BIGGEST downfall of course to the above, and I know Bryan Tutas would agree:
YOU WOULD NOT GET TO BE ON THIS BOARD ASKING QUESTIONS!!!!!
:-)
I wish everyone continued success on the short sale battlefields!!!!
Brigette -- it is a VERY tough pill to swallow, but yes, you may be looking at an uphill battle (most MI companies give you straight "We need this or no deal" responses.
Knowing some of this makes me question why we even bother, PARTICULARLY WHEN WE NOT ONLY HELP THE HOMEOWNER, BUT, ACTUALLY HELP THE BANKS CUT THEIR LOSSES!!!!
End of the day, we are also helping the banks, doesn't that feel good!!!
Anyway, if I were you, I would go to the "top of the food chain" as best I could, with B of A, and see if I could get some no BS answers.
If you have the time, making the same calls to Freddie Mac will get you no BS answers as well......but, it can be VERY challenging getting the person on the other end of the phone to let down his/her guard...approach it as:
"Hey, I understand you will be taking back this home b/c it benefits you to do so versus a short sale, however, just so I can explain to:
My broker
My Seller
The Buyer
The Buyer's agent
the title company
etc.
WIll you please explain to me the reason for your decision.....something along those lines will work.
hang in there....it ain't over until it's over!!!!
Dawn, did you ever get the file rescinded? I called 1800 972-7555 prompt 1,2,6. They set up an inquiry and the eviction attorney called me. I sent her proof of the approval and she forwarded it to Freddie. The person however is no longer in that department so it was assigned to Monica with Freddie. The eviction attorney's office has left her a voice mail and email along with the first person assigned. I followed up with a phone call to the above number and she had to give me a new inquiry number and emailed Monica as we spoke. The buyers told their agent if it is not rescinded today they are walking.
Not to add extra pressure to the almost impossible! I really feel like this file will get rescinded as the eviction attorney took it out of their books in order to fix this. I sure pray to the lord above to get the papers for a rescind today.
Brigitte Powell said:Amen!
Sam Purtle said:My two cents:
1. Something has to be done about this crap. Why are we helping out Bank of America by sending them short sale offers if they refuse to work in good faith? Over and over again it is the same story. Short Sale Demand Letter is received and it states specific terms which need to be completed in order to close the transaction. All terms met and closing at escrow occurs, monies are wired and then the property sells at auction. Or the alternative: short sale demand letter received and during the purchaser due dilligence period and before COE the property sells at auction although a postponement has been granted by the investor.
The solution to this mess is this - suspend the foreclosure auction until after the short sale demand letter timeline expires. pretty simple you would think.
The alternative solution is just to stop doing short sales with Bank of America and letting the million plus homeowners who are in default with them foreclose. They could save a tremendous amount of money by shutting down all of their short sale departments and breaking ties to Equator.com.
What I find humorous is their recent webinar where they are so upbeat and indicating that everything has changed, they are streamlining their processes, etc..... what a load of $$%$%@
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