I've been on here several times with posts of a HORRIFIC short sale. I am the owner of the house involved in the short sale process which has been going on for over a year and a half now. To sum it up it is with BofA and then was recently sold in Oct to Bayview Loanservicing. well really not sold, just handed over to Bayview because the Dept of Justice said that BofA was so far behind on short sales that they needed help. So as this is has been going on, we have had 2 contracts on the house where the buyers have stayed around for quite some time. Our latest buyer whose been holding on for 6 months has started with a price of $195,000 because that is where the last of 5 appraisals had been. WELL, 2 months ago Bayview came back and said that they needed $210,000 and the short sale would close. Needless to say in this year and a half we have had at least 5 closing dates set. We actually moved out of the house 2 weeks before a June closing, and the closing never happen once again. So the buyers said they loved the house and would go $210,000. So that was 2 months ago. When the SS started we owed maybe $207,000 on the house. So not a real big lose for BofA. Well to sum it up, last week we received an email from Bayview stating that the only way this SS would close was for us to pay the PMI company $13,000 and they would set out our payments for over 10 years. REALLY!!! where has this been for the last year and a half. Of course we do not have that kind of money and have no intetntion on signing a promissory note for this. so I told our rep at Bayview that and he said he would relay the information on.
Today our realtor gets a call from Bayview and said that the PMI company said NO to the file unless we sign the promissory note to pay them $13,000. Not quite sure what this figure is from?? SO now the SS will go no where and then the house will end up in foreclosure. Which we did not want to happen. AFTER MYSELF AND MY REALTOR PUTTING IN OVER A YEAR AND A HALF OF THIS CRAP. How can the PMI company decline the SS for $13,000 and then BofA say nothing? BofA will never get more than $210,000 out of our house. We paid $215,000 15 years ago.
Any help would be greatly appreciated!!! I think my next step will be to contact a lawyer. I'm sure I could get a ton of buyers, sellers and realtors joined in in a class action lawsuit. SS were suppose to be getting easier!! Really!!!
T
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PMI's can be different agreements - when you chase them down, talk to someone who will talk to you at the MI, you will probably understand. My last one, which I had arranged for the buyer to take care of but the pinhead seller walked because he didn't want the buyer to know his business?? (Like it doesn't show on the HUD-1 at closing??) The MI agreement with the bank was that they get nothing up to the property selling for $100K more while still paying out to the bank/investor. Also, the bank did not forward the info to me, which the MI did not know - that didn't help.
The MI often gets control because if the bank doesn't go along, the MI can refuse a payout to the bank. In my case, they determined that the seller made enough income to afford $20K cash and that would be all that the MI would get while still paying out more. My deal was something like the buyer paying $50K over market for a $150K place and I saw "the bank" throwing that extra $50K away because they insisted that the seller pay $20K. So, they'd rather foreclose and not get the $20K and get $150K as REO than $200K??? Well, after talking to the MI, I see their point - it makes $0 difference to them. So, would BofA pay the $20K to the MI to get an extra $30K. Nope. Of course, at BofA, bureaucracy is number 1 - everything else is secondary, so that makes sense. (Also, servicers lose money every time a short sale succeeds since they are paid monthly by the investor to "manage" the file.)
Does that make sense? Talk to your MI - you might find a way to get them what they want w/o BofA's help. At least you'll understand what the real problem is.
[Oh, that "SS's getting easier" - for whom? Look at the traffic going down on these forums. The servicers have done a nice job of adding to the frustration level for agents, stalling short sales (adding absurd 3 calendar day demands for any documents while taking months to read what they asked for, etc.). And, I think they said "faster", not "easier" - faster to a denial because the agent couldn't get 5 people to be notarized on a document from 8pm Friday night before Monday morning... Yeah, servicers have the industry "under control" just fine...]
The way I read the facts regarding PMI insurers and recovery by them, the issue is NOT the PMI insurer, but whether the holder/servicer releases the deficiency at the sale, not the insurer. The insurer ONLY has residual rights that are left behind after the sale. Be sure and state that in writing to the negotiator (after finding out the things below). There would also seem to be some legal issue with the insurer suddenly being involved in negotiation after so long a period of time and .....the way I see it...
1. if the insurer recently paid a claim regarding the property they could have some interest, however if they have not yet paid a claim they are not in interest until a loss occurs! Including them in negotiation would be seem absurd and possibly illegal. The negotiator has the right to waive defeciency and that ends the rights of the insurer, period.
2. If the insurer has no loss paid at this time, they have no right in any negotiation. They are NOT a true party in interest...yet. There might be several laws involved in such interference with contract and negotiation.
3. There are two tpes of PMI....one that the buyer pays for and an additional PMI that a holder of the note can purchase....which are we talking about? Did the holder purchase a policy seperately from the requirement in the note? This could change everything regarding any rights of the insurer in any recovery. Be sure and find out.
4. Does the negotiator claim to represent the insurer? You need to demand to know this information in writing.
A letter demanding the negotiator to state thier agency rights and limits with regard to the holder (meaning whether they have all rights of negotiation and decision making and to state specific limits and processes if not) might be in order. This would help you in future negotiation in the matter.
Also include a demand to know how much and when any insurer of PMI has paid any holder or servicer (accounting of losses paid).
If the negotiator does not represent the insurer then they have no responsibility to consider the insurer in negotiation, if they do represent, then they may be in conflict of interest with the holder to begin with (not in holder's best interests). If the servicer does not represent the insurer, then they have the right to wave all deficiency to begin with and by not waiving it under reasonable terms as negotiated for 2 years may be in confict with the good faith process involved on the sale and the best interests of thier client based on the negotiations always having been for release of deficiency and having been agreed to in the past.
Asking all of this will at least stir the mud and make the servicer think about what is happening. The mud will then settle.
I did have a PMI company try to get $12,000 from my client and my client countered $5,000, but they wouldn't budge. The lender would not negotiate with the PMI company at all and, of course, the PMI company wouldn't talk to me. We were at a stallmate and lost the buyer. It appeared that the lender was going to get more money if the property went into foreclosure than if we did a short sale, so they weren't willing to negotiate with the PMI company. My client then filed a complaint with the OCC and next thing you know the lender and the PMI company backed off and we closed escrow and my client didn't have to pay anything. Now, I'm in California so the promissory note was never an option.
Hi Lisa,
I filed a complaint with the OCC last week on this entire issue. I've received back that the bank has been notified and that they are looking into the situation, which should take 60 days for a response back from
B of A, by then our buyers will definitely walk and we will have to relist AGAIN and begin this entire process all over. How long did it take for the bank to respond to the OCC complaint and then follow through to get the SS process to rolling again?
Thanks!!
Hi Carolyn--
So sorry for the hassles. Surprisingly enough, the bank responded pretty quickly. I think it was less than a month after my client filed their complaint with the OCC. We were all shocked. Of course, the bank bypassed me and responded in writing directly to the seller. The seller emailed me the letter, and I then contacted the person who wrote the letter and we got it rolling again quickly. I had to put the property back on the market because once the bank became difficult, the buyer walked. Fortunately I got another buyer quickly and the transaction was very smooth...on the bank's side. I hope this helps and I certainly hope things get moving forward quickly for you!
Carolyn, Patricia is right; often the PMI company will require Something. Often, not always, you can get them to agree to $1,000 to $3,000 when they want a $13k promissory note. No one wants to start over, but usually with PMI, just like larhe HOA dues, you need a buyer who can kick in some cash. Of course if they want 100% of market value, plus a bunch of cash, that's not going to work.