Equator/BOA Short Sale denied.
I've had a short sale get denied because the seller is not delinquent on their mortgage, even though we have show that he is struggling to make the payment every month to the point where he has used up all of the money he had in savings.
We started this short sale back in October and were sent to Equator in December, there were many times when I had to escalate to supervisors because tasks were not being completed. Finally the last week of January I received a counter offer from BOA accepting all the terms and requesting a close date of March 15th. We accepted immediately and were expecting an approval letter within a few days, as has been the case with other SS I've gotten approved.
3 weeks went by and had not gotten a letter so I called BOA and asked what was going on, the rep told me the last email between negotiator and closing officer stated that there were some figures that were missing on the offer worksheet and that they needed me to input them before issuing the approval. This happened Friday March 12th.
I emailed the negotiator immediately asking her to reopen the task for me to complete it. She replied that she would look into it but nothing happened. Last Monday I emailed her again multiple times asking her to reopen the task and finally on Tuesday completed it. Friday March 19th and I had not heard back from her, so I call and was told that she had until Sun, the 21st to review the task.
Monday came and went as did Tuesday, finally yesterday after calling and finding out that she was 3 days past due on her task we escalated to her manager, and I emailed the Team Leader thru equator as well, at which time he responded and told me that he'd see what was going on. Amazingly, the negotiator contacted within 30 minutes and ask for some other info and looked like everything was being finalized.
I was completely SHOCKED this morning when I get an email from the negotiator informing me that the sale was being denied because the seller was not delinquent on his mortgage, and should look into a Loan Mod. or wait until he is delinquent. In the nearly 6 months of fighting to get the case moving along no one ever told me or the seller that he had to be delinquent on the loan, I've had other cases approved where the seller is not behind and simply showed the hardship.
So now the file has been closed, and it seems to me that it was deliberately by the negotiator, rather than I've been told that the seller needs to be at least 30 days late, but have not got any response as to whether we are going to have to start over when he is.
I am not sure if the seller is going to be willing to wait another 5 weeks for the seller to be officially delinquent. I got an email from a VP saying that they have safe guards in place to insure that this doesn't happen, so I must be really lucky that it happened to my case.
So if you have any sellers that are considering a short sale and have not fallen behind on their mortgage know that BOA will not approve a sale unless they are behind.
We started this short sale back in October and were sent to Equator in December, there were many times when I had to escalate to supervisors because tasks were not being completed. Finally the last week of January I received a counter offer from BOA accepting all the terms and requesting a close date of March 15th. We accepted immediately and were expecting an approval letter within a few days, as has been the case with other SS I've gotten approved.
3 weeks went by and had not gotten a letter so I called BOA and asked what was going on, the rep told me the last email between negotiator and closing officer stated that there were some figures that were missing on the offer worksheet and that they needed me to input them before issuing the approval. This happened Friday March 12th.
I emailed the negotiator immediately asking her to reopen the task for me to complete it. She replied that she would look into it but nothing happened. Last Monday I emailed her again multiple times asking her to reopen the task and finally on Tuesday completed it. Friday March 19th and I had not heard back from her, so I call and was told that she had until Sun, the 21st to review the task.
Monday came and went as did Tuesday, finally yesterday after calling and finding out that she was 3 days past due on her task we escalated to her manager, and I emailed the Team Leader thru equator as well, at which time he responded and told me that he'd see what was going on. Amazingly, the negotiator contacted within 30 minutes and ask for some other info and looked like everything was being finalized.
I was completely SHOCKED this morning when I get an email from the negotiator informing me that the sale was being denied because the seller was not delinquent on his mortgage, and should look into a Loan Mod. or wait until he is delinquent. In the nearly 6 months of fighting to get the case moving along no one ever told me or the seller that he had to be delinquent on the loan, I've had other cases approved where the seller is not behind and simply showed the hardship.
So now the file has been closed, and it seems to me that it was deliberately by the negotiator, rather than I've been told that the seller needs to be at least 30 days late, but have not got any response as to whether we are going to have to start over when he is.
I am not sure if the seller is going to be willing to wait another 5 weeks for the seller to be officially delinquent. I got an email from a VP saying that they have safe guards in place to insure that this doesn't happen, so I must be really lucky that it happened to my case.
So if you have any sellers that are considering a short sale and have not fallen behind on their mortgage know that BOA will not approve a sale unless they are behind.
Replies to This Discussion
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Permalink Reply by Bob Wienk on
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That's interesting. Is this by any chance an FHA loan? If so, see the attached.
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Permalink Reply by Juan Reyes on
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No it was not an FHA loan. It was an 80/20 with no MI Co. involved..... I wish they got their act straight over there. No wonder they are losing so much money at BOA.
Wachovia could teach these guys a lesson or two on how to process a short sale. I had a deal approved by them in 5 business days, they asked me to provide my own CMA and even gave the seller $5,000 incentive for staying in the home and maintaining it.
Bob Wienk said:That's interesting. Is this by any chance an FHA loan? If so, see the attached. -
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Permalink Reply by Bryant Tutas on
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Well that sucks! I have yet to have a short sale denied due to the seller being current on their mortgage. As Bob pointed out this is an FHA requirement and may be a requirement of the particular Investor you are dealing with. You need to try and get to the bottom of it. Good luck.
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I was told that it was an Investor guideline and there was nothing that they could do. I just find it hard to believe that no one bothered to look at the loan to see if it was delinquent until yesterday. they could have saved us a lot of headaches, my seller would have gladly stopped paying.
Perfect example of someone trying to do the right thing coming back to bite them in the butt.
Bryant Tutas said:Well that sucks! I have yet to have a short sale denied due to the seller being current on their mortgage. As Bob pointed out this is an FHA requirement and may be a requirement of the particular Investor you are dealing with. You need to try and get to the bottom of it. Good luck. -
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Permalink Reply by CJ Wright on
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hmm... so has anyone ever requested the investor guidelines up front of a short sale request? Would we have any luck?
I once had a short sale denied by Wells Fargo b/c the family moved out of the home 'cause they simply could not keep it tidy (5 kids, including twins less than one year old). Apparently no one noticed the investor guideline that says it had to be owner occupied up until the close.
After everything was done, WF denied the short sale request, foreclosed, then I successfully got the foreclosure vacated. Home is back on the market as of today... All this time wasted; if only we had known... -
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Permalink Reply by Jim Hale on
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Have you read the news in the last few days? Front page news all over the country: BofA is moving toward principal-reduction loan-modifications -- at the insistence of the government (and and some key lawsuits against them in Massachusetts). Would your seller have a hardship if his principal was reduced (up to) 30%?
Then, all bets are off.
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Yes, there would still be a hardship due to the fact that the home has not fallen in value as much.
Here is a synopsis of the hardship:
The home was purchased under 1 person although 2 young (Mid 20's) married couples were living in the home. The 2 husbands are both on title but only 1 on the loan and they were paying for the mortgage and utilities 50/50.
The husband not on the loan (but on title) is currently unemployed. Him and his wife along with their son have moved to her parent's home because the wife is the only income they have and can not afford to pay their half of the mortgage.
The husband who is on the loan is an electrician and has had his pay reduced and hours cut back
The home was purchased for $395K on a 80/20 both with BOA. Currently under contract for $350K, values in this neighborhood have fared better than other areas around here due to proximity to schools, metro etc. (it's a nice neighborhood.)
Even if BOA reduced their principal from $395K to current value of $350K, it would not make a significant difference in the mortgage payment, and there is no way BOA would reduced the principal to $270K (30%) if they know the home is worth $350K.
So with a short sale at $350K BOA is not taking a huge loss compared to other deals I've gotten approved where values have fallen so much that they take loses close to $200K.
Jim Hale said:Have you read the news in the last few days? Front page news all over the country: BofA is moving toward principal-reduction loan-modifications -- at the insistence of the government (and and some key lawsuits against them in Massachusetts). Would your seller have a hardship if his principal was reduced (up to) 30%?
Then, all bets are off.
Suddenly. -
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