You have GOT to be kidding me- what BofA wants from short sale buyers now
So according to my negotiator at Service Link, BofA has a brand new guideline: All short sale buyers must provide proof of funds for Earnest Money & Down Payment at the time we submit the offer. (in Oregon EM is not deposited until we have ss approval).
I am beginning to think short sales will soon be a thing of the past..between Fannie Mae's absurdly bloated valuations and BofA roadblocks get me some Xanax. UGH
Replies to This Discussion
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Permalink Reply by Mike Rizzo on
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Lots of short sighted realtors only looking at something from their clients point of view. Can't see the whole picture. Hmmm, why wouldn't a buyer want to disclose funds on hand in a short sale situation??? Maybe its because the price of the property isn't set yet. What do you think the investor will do if they see the buyer's resources far exceed their offer? Will they think the buyer is financially capable (the party line) or will they think that the buyer can afford to pay more. When they arbitrarily require this information, they put themselves at a distinct advantage. They raise the price of the property to get every nickel they can, even if it means going 10, 20, or 30% over market value. Why give them the gun and the ammunition to shoot you. I have buyers get a signed letter from their bank saying that they have sufficient liquid resources (earnest money, down pymt, or cash purchase--whatever the case) to cover the $XXX required. This way, the buyer is not disclosing anything more than their ability to meet the terms of the contract.
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Permalink Reply by Bill Sloss on
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Mike I think Im in love
Thank you for making this point apparently few can see
Maybe its because the price of the property isn't set yet. What do you think the investor will do if they see the buyer's resources far exceed their offer? Will they think the buyer is financially capable (the party line) or will they think that the buyer can afford to pay more. When they arbitrarily require this information, they put themselves at a distinct advantage. They raise the price of the property to get every nickel they can, even if it means going 10, 20, or 30% over market value. Why give them the gun and the ammunition to shoot you.
And when you give them the license to drive they will drive at their leisure because they are sure you can buy and theyll take their time aided by short sighted realtors who dont feel buyers matter much
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Permalink Reply by Tony Morales on
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Mike you are wrong The bank or investor is not going to counter based on the buyers proof of funds. They would counter on the value..period. Just the same as a buyer can reduce the sales price after they have an appraisal. Has nothing to do with how much in their bank account. Let me clarify, as their so much misinformation between agents, and on this website. Aside from the bank requiring to know that the buyer is qualified to make the purchase, one of the main purposes of banks acquiring financials from sellers and proof of funds from buyers is simply for auditing purposes. Having worked for a major lender in a short sale department for over 5 years, I am very knowledgeable on policies and procedures of most banks.
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Tony do bank or insurance company employees ever commit fraud or embezzle?
Ive never heard of any such things. Yeah..Right
Youll have to forgive me but saying banks requiring financials from people who arent customers or havent purchased a thing is a bit of a stretch.
If its a banks auditing requirement good for them. it doesnt force me to comply. And if a bank gets caught doing it good luck to them theyll need it.
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really bill? what does fraud and embezzle by bank employees have to do with this subject. We were discussing counters by bank and whether they considered the buyers funds.
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Whatever you say Tony. But didnt you say
Mike you are wrong The bank or investor is not going to counter based on the buyers proof of funds
Mike said What do you think the investor will do if they see the buyer's resources far exceed their offer? Thats a reference to bank statements
You said Aside from the bank requiring to know that the buyer is qualified to make the purchase, one of the main purposes of banks acquiring financials
My point is there is no reason to expose any financial information to anyone other than what is required to fulfill the contract. Exposing that information to the wrong people puts you at risk.
For an example the signature guarantee banks use. I can get all your money using that simple tool if I know where it is and have access to your basic information I can get from your trash can. So giving someone that information isnt very smart.
Lots of crimes happen from banks and insurance companies.
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Bill--Fannie and Freddie come back all the time with higher prices based on the buyer's financials. Now sometimes, they come back for a higher price for no other reason than they want more money. It can't be supported by their own appraisal or BPO, but they ask anyway. If they see a buyer with a fat wallet....they try all the time. By submitting a bank letter and not an actual statement with balances, they can't figure out what the buyer has in hand. Bill, you have many posts on this thread, I can't believe you think that Fannie Mae and Freddie are playing fair. Here in AZ, short sales are becoming more and more difficult because of the over-market counteroffers that these two giants are making.
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Mike where are you getting your information from? That is absolutely not true!. Yes, as we all know, Fannie has been coming back with values above the BPO but not for the reason you've stated. If a negotiator at a bank told you that was the reason they were very untrained. One reason is FM has determined that prices in certain markets have been increasing and, if the loan is already in foreclosure of which they have already paid the expenses, then they feel they may get a higher net as an REO. They also counter higher to give the servicer delegation to approve the short sale which rarely happens. Recently, Greentree said FM countered our $90,000.00 offer at $122,000 and said they wanted net if $113,000. Buyer increased offer to $110,000. with net of $94,000. We gave them comparables to justify this price. GT resubmitted to Fannie and approval received 4 days later.
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Not me brother Im on your side all the way.
Look above you
Mike I think Im in love
Thank you for making this point apparently few can see
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Permalink Reply by Jim McCormack on
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Bill, I could not disagree more. Sellers have a duty to disclose material defects with the house. Buyers have a duty to disclose material defects in their financials such as bankruptcy, lack of funds to close. Please see the court case where a buyer withheld their financial information from the seller and kept telling the seller they could close. Eventually, the seller was foreclosed and it turns out the buyer was full of BS and could never close due to their financials. The judge ruled that the buyers behavior caused damages to the seller and that the buyer had a duty to disclose to the seller that could not obtain the mortgage to close since it was obvious that they could not based on their financial situation, which the seller was not informed of. You can't have it both ways with disclosure. The buyer absolutely needs to prove that they can close. Too many short sale investors think they can just shotgun non-binding offers to naive short sale listing agents and the buyer can walk with no consequences. If a buyer wanted to write a cash offer on my property, but refused to provide a bank statement showing that the money was available the only way I would accept their offer is with a large (I mean massive) EM deposit. Since the banks require the proof of funds on short sales this method is not an option.
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Feel free to disagree. Obviously Im correct. I said either is free to breach and pay the penaty. Every contract faces breaches thats why theres a clause in them and court cases to support the breach.
If it was a concern why didnt the agents insist on proof. Easy to do. BA gets proof and verifies to the SA. End of story. But then again I guess thats why you guys have E&O coverage.
Of course I can have it both ways I just did.
The buyer absolutely needs to prove that they can close. Not realistic not practical not possible.
A house is sold on a buyers contingency and buyers sale falls through. They cant pay two mortgages so they are forced to breach. You cant guarantee everything.
Too many short sale investors think they can just shotgun non-binding offers to naive short sale listing agents and the buyer can walk with no consequences. Give them consequences for breach dont cry about it no offense intended.
If a buyer wanted to write a cash offer on my property etc etc.
Dont be silly you are required to present every offer. Present it as your ethics requires and then reject it for cause. One of the problems is when people start to think oh my way is better.
My point is there is no need to disclose total finances like someone said here using "well if they really want the house." Ridiculous.
You provide a statement regarding the funds. if theres a question you verify the funds. Thats all the lender or the SA needs to know. If theres a question you provide a contact name and an authorization to release the limited information ONLY you want released. Easily done.
My big points are timeliness and communication. Far too many SA rely on the bank or title company to do their work for them. And when there is no pressure to get the deal done guess what happens? It takes forever. For most SS its just excuses because people are too busy or lazy. If I didnt know what I was doing my poor realtor would be taking a beating on phone calls and emails asking when and whats up? He doesnt get those weekly calls because the SA isnt doing his job and we know it. The title company is carrying the water and not very well. It allows me time to abuse my realtor on other things
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exactly Jim....
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