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On Ounce of Prevention....May Save Your Sellers Some $$$$

Posted by Sally K. & David L. Hanson on December 28, 2009 at 12:09pm in Short Sale Discussions

Different states have different laws....each of us as short sale listing agents have different experiences....and I do not mean to imply this to be a situation that is always and everywhere...it is here...and "May come to your market soon." As soon as we take a short sale listing...if the seller(s) have any sort of accounts in the same bank that holds their mortgage....we have them switch banks. Lenders here, have emptied these accounts that were savings for moving expenses, security deposits, etc. They can....it is legal....and they can choose to apply or not apply it as they see fit to "expenses", interest, etc. While this may not be a practice where you practice currently....better safe than sorry. Sally K. & David L. Hanson , CDPE - Wisconsin

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Replies

Deanna Dopslaf August 23, 2010 at 10:03am

Fantastic! I just had a homeowner who had a mortgage with Wells Fargo and all of his banking with Wells Fargo. At the end of July 2010, right after both his and his ex-wife's payroll hit their personal banking accounts, Wells Fargo "transferred" their entire balances from banking and savings to cover the late payments on the mortgage! This left them without a dime to live on and Wells Fargo claimed their banking agreements gave WF the right to do this. We are still working on this issue. So before it is too late....transfer accounts!
Karen Mathers August 7, 2010 at 5:41am

I just had a customer that stopped making their mortgage payments and the lender took the money out of their account to pay for the 2 months that were due. They have their bank account with the same bank that has their mortgage. Needless to say they changed bank accounts right away!
Shannon M Thomas July 14, 2010 at 9:57pm

Great advice. Thank you will pass this along. Better safe then sorry.
Sylvia Finocchiaro February 22, 2010 at 4:17pm

I agree "better safe than sorry"...its a little too close for comfort to have $$$ in the same bank you are late or defaulting on.
Sylvia Finocchiaro, Certified Short Sale Negotiator - Scottsdale, Arizona
Elizabeth Monje January 24, 2010 at 5:37pm

Good post...Thanks!
Jim Hale January 15, 2010 at 9:31pm

Whatever happened to the idea that a bank had a fiduciary duty to it's depositors?

If this is legal in any state, it should not be. It's not in mine....without a judgement.
Tracy Howard January 11, 2010 at 3:31am

And, then, since I did my posting a half hour ago, I just got a call from one of my sellers saying money has been removed from their bank account by the foreclosing lender. Here we go!
Tracy Howard January 11, 2010 at 2:56am

Wow, Sally and David, great information. I haven't seen this YET here in Denver, but thanks for the heads up. I have put a notation in my pre-listing package to be sure to discuss this with my sellers, and get them moving toward emptying out any accounts with their lending bank. Great info!

Tracy Howard, CDPE
Keller Williams Realty Downtown
Denver, CO
Wendy Rulnick January 8, 2010 at 2:19am

Richard, How can this be legal?

Richard Zaretsky said:
HOLD YOUR HATS!

A client came in today and told me that Bank of America, on a 2nd mortgage equity line, brought his loan current by making - no TAKING - a cash advance on his credit card with the same bank!
Sally K. & David L. Hanson January 7, 2010 at 3:13pm

That's a new variation....and a good alert.....! Mattress money is the only safety net until it's over....and I would think that if any sellers are charged with part of a deficiency, they need to find another banking institution as well.