I’m just sick and can’t seem to find my way. My client has a first and a HELOC with Bank of America. The first is not short, only the HELOC by about $35,000. Within 2 months we received our approval! Buyers signed docs and put their remaining funds into escrow to close. Bank of America declines our final estimated HUD-1 and the deal falls flat.
B of A remarks that they cannot approve the net. They are insisting on a payoff for the first for $244,000 when the principle balance is only $190,000 with only $12,000 going towards the HELOC. B of A states that the net must be at least $202,323. Balance on the HELOC is $115,000 btw.
They want the seller to pay $54,000 more towards the first than what is owed??? I do not understand this and cannot get anyone to explain. Is this a bad math error or are they diverting funds from the 2nd trust deed for a real reason that I do not understand? How can the net requirement be met if the first is not short and B of America is only allowing for $12,000 going to their second?
Can someone explain this to me?? If we re-submit this file, will the sellers receive this same scenario all over again? I’m also concerned with the amount of debt forgiveness provided on the recourse note under B of A’s approved demand. What the heck??
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Given that the first and the second are serviced by Bank of America it makes it impossible for us to play hardball with the first or the second since I assume they are in accordance with similar guidelines regarding short sales. I wish we had the ability to speak with a different negotiator on each loan but no such luck.
We did order a regular demand on the first and submitted the final estimated HUD using the payoff provided from Bank of America on the first trust deed ($191k) and the amount they demanded for the second ($12k) which is approx. $100k less than the full balance of the HELOC. That is when they came back and said “no deal” and that our payoff did not meet or beat their “net” ($203k). Beyond that we received no additional instruction and the deal fell through. So, ultimately we did end up saying “no” although quite relunctantly.
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