Replies to This Discussion

Permalink Reply by Alan Remigio on April 17, 2010 at 6:27pm

Diane,

If the 1st does not qualify for a short sale, then it is not one, Overall. I do not know what your buyer wants to pay, but it seems to me, it is more than the balance of the first combined with thenegotiated 2nd..The first wants to cover all costs. My suggestion is to get the normal payoff for the first, and pay the 2nd per agreement ($15,000). Almost always, the 2nd just wants the cash. You can arrange for a POC on the 2nd to avoid any more hassles with the first, if the 2nd balks. A good excuse is that you don't agree with the 1st's value for paying the 2nd and you will settle outside contract to avoid any possible negotiations to reduce their payoff.
The first now has to deal with you because you are now asking for full payoff as opposed to a short sale. The real question is, can you do the entire sale with no $$ coming out of the seller's pocket?
Lastly, seller contribution is pretty much non-existent because this is not a short sale.If it does qualify, the consensus, on this site, is to tell the negotiator, "no".

Permalink Reply by Pacita C Dimacali on April 17, 2010 at 6:38pm

On two occasions, where there were two loans, I received offers that were just enough to pay off the first. Then I ran into a brick wall with the second who demanded more.

After months of "negotiation" the buyers were about to walk. So we strategized and had the buyers resubmit their offers at LESS than their original offer, and which resulted in not having enough to pay off the first loans.

Remarkably, when it was evident to the second lien holders that the first loans will be short, too, they were more agreeable to the short sale after they were told that 1) the buyers were walking; 2) market values and market comps show declining values. 3) because property was on the market for a long time, new prospective buyers may be reluctant to write offers. As such, the foreclosure may be the only option if the lenders did not approve the short sale..

Although the first offered the second only 10% of loan balance, the second asked for a little bit more for payoff which the buyers were willing to give. The buyers still came off paying less than their original offers.

Go figure.

Permalink Reply by Diane Wheatley on April 17, 2010 at 6:41pm

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.

Permalink Reply by Karyl Moore on April 18, 2010 at 7:01am

I had a simlar thing happen with B of A and in my case I think it was because they didn't think the Sellers' hardship was hard enough and this was their way of declining the whole thing.

Diane Wheatley said:

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.

Permalink Reply by Peggy James on April 19, 2010 at 1:34am

Diane, I have the exact same thing happening now. House was listed for sale $279,900 at end of Novemebr 2009, home went into a bidding war and contract was ratified for $285,000 on December 7th, all doc's were submitted all doc's to BOA. This is a two loan short sale, 2nd with Wells. Finally we got a response in March, BOA wanted $330,000! Yes $45,000 higher than the contracted price and $50,000 over our list price. ( sound familiar?)
Long story short, both the primary buyer and the back up ratified buyers could not go that high. Ok, so what do you do. Against my better judgement I raised the list price to $330,000 ( with seller approval ) and in our hot spirng market...no offers for more than two weeks! We called BOA got in touch with a supervisor who agreed to lower the price to $315,000. We did get another offer, at $315,000 within a week. Guess what...BOA returned another tenative approval at $335,000 ! Yes, they went up $5000 in one week!
They will agree to the $315,000 if the buyer will drop the request for closing cost help. The buyer is a Veteran using zero down financing asking the seller to pay closing costs. ( we are located within driving distance to five miliary bases-this is the norm in our area) BOA doesn't care.

So what do you do?

Just an FYI- our team was representing a buyer on a BOA short sale purchase. House was just under $400,000 buyer offered $450,000 in a bidding war. It took BOA four months to return terms. They raised the price another $50,000. ( sound familiar?)

In both cases buyer and sellers are doing what it takes to meet the terms. However, we all know that just because we get a short sale final approval, we still have to get it to closing. I will be interested to see on your case and our two, if the Certified Uniform Appraisals will be close to the value BOA wants for the home.

Short Sales with BOA are painful, frustrating. The verdicts may be coming in faster, however the terms are darn near impossible to match. Is this BOA's way of forcing people into foreclosure. Only time will tell...