Replies to This Discussion

Permalink Reply by joe beauchamp on August 6, 2011 at 9:53am

Well, you do a lousy job of summarizing, but then you don't know what is important, of course.

BOA is a freakin' mess.  I am thinking about dumping them (all I do is short sales - that is it. Short sales for lawyers and agents).  They are really slow right now and coming back with insanely high counter offers (my last one was for FULL payment of the loan as a short sale - the price this lady paid at the height of the market!  Like that could possibly be the value of the property..).

Since this is BOA, and about all I do is BOA, I think I know what you are talking about. It sounds like the seller is trying to do HAFA - HAFA gives them $3K to move out, they are released from all debt after the sale and cannot be asked to contribute anything to or after the sale.  BOA uses other companies to do HAFA - scapegoats (BOA exports finger pointing, that and making record profits are the best things that they do).  7/1 they cut off UTLS for the majority of these short sales  (and damaged 2 of my sales in the process).  It is a mess to get things in the right place at BOA.  They use a system that is not great and they don't use it properly or well.  I probably average 3 or 4 "restarts" to fix what BOA or their system has done vs. real completions or denials - really bad stats.

 

So, your offer probably got caught in the 7/1 mess.  Also, dealing with BOA these days takes a lot more effort to keep them on track and to try to get responsible action and hopefully a real closing.  This is what I do.  This is NOT what most agents do.  They don't have the understanding or the time and BOA makes it very difficult.  So, any little slip from your listing agent gets magnified into a world crisis at BOA.  BOA is slippery, so simply not being aware of what does not work properly there can create such a slip.  You probably have BOA doing their normal massive delay dumb things and your listing agent making some mistake.  Result is a restart - as if you just walked in the door, all over again and over and over, with BOA.

 

You mentioned underwriting - I only hear that term in regard to HAFA.  This generally takes a month.  BOA does not do anything smart with this.  If anything happens which requires a restart, they don't see that this has been done, they do it all over again.  They blame delays on AMS, UTLS, LRC, etc. (these HAFA sub-companies) but all that work is actually done by BOA negotiators at BOA, not AMS, UTLS, etc.  You could make a very strong case for BOA doing everything that they can to make HAFA so slow and bad that they must be doing so to stop HAFA - or short sales in general.  Again, what do they care, during all this mess, they made record profits last year.  Short sales are just a pain to them and they certainly don't care about homeowners.

 

You could actually have a feel for where they are if you asked.  After the underwriting, it turns into a regular short sale, except, if it is HAFA (and BOA has a new thing to avoid HAFA for FNMA and Freddie - probably what you are looking at), HAFA sub-co's have to request each step at a time be done by some BOA negotiator instead of the BOA negotiator just doing them one after the other.

You can ask who is processing the short sale - if the listing agent tells you AMS/LRC/... then you can expect larger delays because the agent cannot find out who is sitting on the short sale and not doing the job.  If this is the newer FNMA, or regular short sale, it will be faster - they are held accountable and the agent can get their names.

After the underwriting, the BPO is added in and the NPV button is pressed (in financial terms, Net Present Value of the property).  After that (because BOA will not save time by asking for things before they are needed), BOA will ask itself what is owed.  This usually takes a day or so, if you are in HAFA at a sub company, I've seen this take multiple months - insane.

After the payoff is received, the negotiator plugs it into the calculator and hits the button to get the minimum amount that the investor will accept. (Again, at a HAFA sub-company, I've had simply hitting this button take MONTHS!)

After that, the negotiator will think back to his last lecture about how to gouge the homeowner for as much as possible.  And, a counter will come out and the listing agent will tell you that BOA wants $X and you only offered $Y.

If HAFA, they cannot ask for cash from the seller or him to sign a note.  If not HAFA, they almost always throw in one or both.  It is rare that they actually look at the seller's financials.  I almost always get them to swallow hard and drop the demand because I go over the numbers before talking to the negotiator - he does not.  Gee, you want $5K at closing, he makes $1K/mo and has bills for $2500/mo and $100 in his bank?  What are you smoking?  Or, he owes $200K to credit cards, friends, etc. and you want him to pay a $10K note, too?  Yeah, right.

 

And that sums up what you are probably looking at.  Except, BOA has an immense ability to screw up the closing.  They frequently give an approval which is invalid and can take months to correct it.  Yes, really.

 

So, if you keep the process in mind, and ask the listing agent which co. is processing this and where are they now in the process, you can follow along and see the progress.  The negotiator can make a huge difference time-wise going in either direction.  They can drag it out or speed it up.  Most plod along.

 

My guess would be that from restart, you have 1.5 to 2 months before you'll hear the counter.  Be prepared to think about getting an appraisal from your mortgage co.  BOA will listen to that, if you find that they have yet another insanely high number for you.

Permalink Reply by Bryant Tutas on August 6, 2011 at 1:43pm

Paula. It only been 66 days since you went under contract. In short sale world, especially when dealing with BofA, you are still in the early stages. Short sales take 90-120 days to be approved if all goes according to plan. 

Your expectation to close on 30 June was way out of line. My suggestion would be to let your agent keep pushing the listing agent. You should see some good forward movement by the end of this month. That will be the 90 day mark.

If you really want the property then be patient. While BofA may be slow they are very good about approving short sales.

Hang in there. I truly hope this all works out for you.

 

Permalink Reply by Paula k on August 6, 2011 at 3:30pm

Thank you so much for the responses. We now have a better understanding of what we are dealing with. Can anyone explain what underwriting means, and what step comes next? Does underwriting mean that the bank has finished negotiating a price and want our offer or might possibly counter? Or does it mean that the bank can say forget it and tear up our contract completely? I have a feeling the bank can choose to do this at any time....

Permalink Reply by Paula k on August 10, 2011 at 5:59am

Ok not much new to report but we just received an email from our realtor with something I have never heard of before.  She says that the sellers agent has been unsuccessful at getting in touch with BofA (they are not returning multiple phone calls) but he promises that "the underwriting process cannot take more than 30 days and today we are on day 23".  Is this true? Can you not take longer than 30 days in underwriting? What happens if we exceed 30 days?  Judging by how slow its been I am expecting it to take another month or so (even though we are on the fast track)!

Permalink Reply by Jeff Payne on August 10, 2011 at 7:06am

Paula, you got some good advice on here.  I just have one question, why do you automatically assume that the listing agent was being unethical?  One could probably say the same thing about your realtor and mortgage broker if we are just going by assumptions because if you will pay $10,000 more, why did your agent not submit it?  Why is the mortgage broker convinced that he knows what is happening?

I only post this because we have to stop just assuming someone is always doing something wrong.  Short sales are tough enough without trying to throw people under the bus.  
If you are only a few months into it, you should have already known that it can and may take 6 months to get it done.

Permalink Reply by Jeff Payne on August 10, 2011 at 7:08am

Paula, the reason that they are not returning phone calls could be that the standard protocol is to communicate thru Equator or through email.  BofA has a hard enough time as it is and there is probably no way that a negotiator would be able to respond to every phone call that came in.
I think "fast track" is going to turn into another urban legend because fast and Bank of America don't go together. be patient
Paula k said:

Ok not much new to report but we just received an email from our realtor with something I have never heard of before.  She says that the sellers agent has been unsuccessful at getting in touch with BofA (they are not returning multiple phone calls) but he promises that "the underwriting process cannot take more than 30 days and today we are on day 23".  Is this true? Can you not take longer than 30 days in underwriting? What happens if we exceed 30 days?  Judging by how slow its been I am expecting it to take another month or so (even though we are on the fast track)!

Permalink Reply by Paula k on August 10, 2011 at 7:11am

Thank you for your post... you are absolutely right. I am only repeating what my realtor said of their realtor.  He has not been honest with us from the beginning.  He told us what amount to offer which rubbed our realtor the wrong way from the beginning. Then he went M.I.A. while we were setting up our closing.  We didn't know that bofa got involved until the bank called our mortgage broker to get our info.  When we called to inquire what was going on and why they switched banks, they were dishonest again.

 

I hate to assume the worst of people, and I'm trying to start fresh with everyone involved.  I understand it can take 6 months.  The problem is everyone involved is promising a quick close (including bank of america) and I know that promise will be broken, so I have no idea who to trust.

 

I asked our realtor if we should offer more and she said it wouldn't do any good at this point.  I dont understand why but that is the only answer we got.  I didn't ask her why but maybe I should. 

 

The problem with this situation is that there is a lack of communication from Bank of America, which is leading us to all over-assume!

Permalink Reply by Jeff Payne on August 10, 2011 at 7:24am

I am still confused on how or why you think they switched banks?  Did the loan get sold or transferred from their original bank to Bank of America.  It happens all the time and the seller or their agent have no control over it.   I dont see any problem with the listing agent suggesting what to offer, many times we have already communicated with the banks and have an idea of what the property may sell for or what the bank may accept.

I am going to play devils advocate and say that your mortgage broker and your agent dont have a solid understanding of a short sale because if they did, they would both know to NOT schedule ANYTHING as far as closing until you have an approval for the short sale.  

I will go further and say that it appears to be a lack of communication coupled with a lack of understanding of the short sale process.  Yes the sellers agent should be giving updates BUT the buyers agent should know better than to take anyones word for anything and base your best interests ONLY on written documentation that the short sale is approved.

I certainly cant see how the listing agent had anything to do with a mortgage being assigned to Bank of America from the previous lender. 

How many short sales has the listing agent closed?  How many has your agent closed?  If your agent can not answer the first one, they have not done their due diligence in looking out for your best interest, just my opinion

Permalink Reply by Paula k on October 1, 2011 at 4:54am

Just giving an update on our situation to see what you all think.  Again, I am not a realtor and have no prior experience on purchasing a home, let alone a short sale.

 

When I wrote my post in the first week of August, we were told we were in underwriting.  On August 18th, I told my realtor about the idea of asking Bank of America on twitter for help, as recommended on this site.  She said that wasn't neccessary, as we finally heard from the seller's realtor, who finally heard back from the bank, and we were very close to closing.  The next week, the bank ordered an appraisal of the home, which our realtor assured us is one of the last steps before closing.  The seller's agent made some mistakes on submitting the appraisal, and that set us back 2 or 3 weeks.  We heard this week only that "the bank is making progress" in the final evaluations. 

 

It is now October 1st.  This is month #5 of waiting to close.  I understand that short sales can take on average 6 to 9 months, and luckily our landlords are not in a hurry to end our month-to-month lease.  So we can stay put for now, we are just wondering what the hold up is? What exactly needs to happen so we can close?  Is asking BofAhelp on twitter a good idea at this point, or should we just keep waiting and try to be patient?

 

also, the sellers had proposed an idea a few months ago of starting a buyer's lease for $500 a month.  At the time, that seemed proposterous.  Now we are considering it to be a decent idea, only if we need to move.  Any suggestions on this, if it comes down to that type of situation where we need to move?

Permalink Reply by joe beauchamp on October 1, 2011 at 9:06am

Paula, the sequence is: get most/all documentation; (if HAFA) validate the seller (underwriting); get BPO/appraisal; calculate property value; get bank payoff amount; calculate numbers acceptable to investor; negotiate; validate agreement documents; close; validate close.  The bank doesn't want to pay for the appraisal unnecessarily so waits for documents that show this is looking like a real deal.  Other than that, the first thing that they need to do is get the value of the property.  How does it make sense that one of the last things they do is figure out the value of the property as you say?

Also, the BPO/appraisal is not done by your agents - this is done by someone paid by the bank.  The listing agent will not have done something incorrectly about the appraisal.  Again, think about it - is the bank going to ask the listing agent if the sale is a good deal?  Nope.

I can see these missteps due to limited communications or a listing agent who spews excuses - I cannot tell.

So far as renting/leasing the property, bad.  Sometimes, the buyer has made repairs, etc. and the deal died - buyer loses anything put into the place and is kicked out.  More frequently, I see the buyer either moving in at a much reduced rent to "protect" the property, etc. and then decide "not interested" and walk or tear the place up and walk, or impact his credit so that he is no longer able to buy the place.  Because of what I have seen, I haven't bothered to go farther and look at objections that the bank might have - someone else could speak to that.  If you were the seller, I'd say you are looking for a beating.  As the buyer, you just have to be prepared to lose the deal - not the bad exposure of the seller.

Permalink Reply by Jake Bowers on October 1, 2011 at 3:30pm

Hi Paula,

You are getting advice from some fo the best people on this forum; glad you are listening to them. Just a bit of expereince from having been in your shoes:

- Read all over this forum and in non-BoA forums to understand how Fannie Mae, Freddie MAc, 'other' investors, and mostgage insurance work into the short sale process. See if you can find out the orginal amount of the seller's loan on the house; if the orginal amoutn was less than about $417,000, then this is likely a loan actually held by Fannie or Freddie and serviced by BoA. BoA has to process all this short sale through the entity holding the loan: Fannie, Freddie or another investor.

- The communicatons with BoA is through the sellers agent; sounds like that is not working well. It is up to your agent to get as much as he/she can from the seller's agent.. Our agent did her best but some times there were lapses with no news for weeks and even a couple of months. We got to the point of making regular bi-weekly checks, but no more.

- I will make a completely wild guess that: your offer was initially held bakc by the sellers agents, waiting for the bank to agree to the seller's request for a short sale, and THEN the seller's agent put your offer in. Then there were delays as the seller's agent figured out how to work the BoA system (and it sounds like he/she muffed it.) No matter; you're in the BoA short sale process.......congratulations. The old forum avatar was a lunatic in a straight-jacket for good reason....

- Your agent does not appear to know much about short sales if he/she had you start your loan process; however, that may be mitigated if the seller's agent did not tell your agent that the house was going into a short sale status.

- BTW, as of last year, a BPO was good for only 90- days in BoA-land; I assume that is still the case. So if this drags out too long, another BPO will be needed, and the there will be another delay as the new BPO gets re-cranked into the formulas; FYI. our short sale took 3 BPO's. It wil take quite while at times to get to any next significant step from a BPO. In our case, the first was done quickly, then had to be re-done 3.5 months later, and only THEN did we get to the point of negotiating a final price with BoA.

- Negotiate a final price you say? Please understand that the price you negotiated up front was just an initial offer. and the buyer accepted it, and then pushed it on to the bank for the banks apporval. The holder of the loan (probably not BoA here) has the final say on whether that offer price is acceptable to them. So, you may be in for another round of price negotiations. Good thing you kept somethign held back at the adivce of your agent. That round may well be BoA negotiating to get what they can ,and THEN they take that to the investors.

- Speaking of final negotiations do you have any appraisal of Fair Market Value done by an independent appriaser? If you don't have a good idea of fair market value, and want to get a decent deal. you need to know the FMV. With FMV, you will also know if your offer is likely to be accepted by BoA, or where the price should be to satisfy BoA. Some of the folks here can give you the best idea of what % of FMV that BoA will settle for. See if you can get the appraisal that done by your mortage company (for your loan that was ready last summer)  as a starting point.That may not be FMV so consult with your agent.

- In my opinion, I would NEVER do the rent thing. This could get much messier, and if you get into negotiations and Bo A won't accept what you feel is an OK price, then you might as well stay where you are. A short sale can be a very iffy thing, so there is no point in getting in too deep unilt the sale actually closes.

- Just our expereince: We went 11.5 months before closing a short sale. 3 BPO's, negotination with BoA about 5.5 months into the process after the 2nd BPO, then dead sllence while it either sat around or something, then all of a sudden 10+ months into the process; it was approved , and then we scramlbed like heck to close. So the ride can be long.  

Good luck!

Jake B.

Permalink Reply by Paula k on October 3, 2011 at 3:57pm

Thank you for all of your wonderful suggestions and feedback! Honestly a lot of it goes over my head, but I know we are in good hands with our realtor (who by the way has short sale experience and we trust her completely). She has done everything she can at this point. Now its a waiting game! I will provide an update when I get one. I am hoping we are past the property value assessment stage, since the appraisal was received weeks ago.