Bank Of America short sale expert needed -I have an approved short sale but issus with the type of release
Here is the situation- BOA approved an offer of 450K with 3% c cost credit on an outstanding 1st mtg of roughly 890K .
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There is a second that was approved by Real Time Resolutions in the amount of 3K with a payoff
balance of 145k .
The BOA standard short sale payoff language allows the bank
o pursue for the deficiency.Has any one ever been successful
in battling with BOA on full release of lien and morgage without this potential to be pursued
for the deficiency?
My seller of course refuses to close. (Note; Home is not even in foreclosure.
even though he is behind over a year in payments.-he has it rented and collects the income of over 3500 /month in the interim)
My theory is BOA must realize that the wife never signed on the mortgage so the closing was actually done wrong.and loan cant be enforced.thru forelcosure.
It sure cant be an oversight after a year.
Seller would prefer to file bankruptcy rather than have such huge exposure.
I want to use that as a tool to try to renegotiate the terms of the short sale.
Question: With whom and at what level would you be dealing with to do this?
The negotiator? Theclosing dept? The short sale area manager?
Short sale manager last week told me it would take an act of congress or god to have that language changed by the legal dept.
I feel now may be the right time to play the bankruptcy card and use seller's attorney
to draft a letter showing seller actually made an appt to meet with him.
Position it so that I am not the " bad guy" but that under seller's legal counsel,
advise that if seller elects to go this route, the property will be tied up in trustee with bankruptcy court .
I have never had to go this route before becuase all my deals with other
banks were full releases.
Just got the letter on March 4th so I want to act on this asap.
Please help if you have dealt with this in the past.
Replies to This Discussion
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Permalink Reply by Bryant Tutas on
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Al, I doubt seriously if BofA will remove or change the language in the demand letter. Your seller needs to seek legal advice. This shows why it is so important that we tell our sellers at time of listing that a short sale is not a free walk in the park. There are negative ramifications and one of them is the possibility of a deficiency judgment after the closing.
My job as a broker is to sell the property and get the lender to remove the lien so it can close. Deficiency judgments, bankruptcies and all that other stuff are for attorneys if the seller wants to hire one.
Of course all of this may change after April 4th when HAFA goes into affect.
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Permalink Reply by Paola Martinsen on
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I have never heard of anyone being successful at having them change their verbiage. if the seller is wiling to file BK he can always include the potential liability for the house with the bk after the short sale. That way he will have a short sale on his credit versus a foreclosure. They must realize that short sale or no short sale he is still responsible for the deficiency unless he files BK or settles the account for 85% of the balance (that's what they asked my seller for). Good luck! im kind of on the same boat with one of my deals. They reserve the right but that doesn't mean they will. They could always do the SS and then if BAC tries to pursue them they file BK then. There is a chance they may not, so its worth doing the short sale in my opinion.
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Permalink Reply by Al Goldin on
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Thx for your opinion as I share the same idea.
PaolaMarin said:I have never heard of anyone being successful at having them change their verbiage. if the seller is wiling to file BK he can always include the potential liability for the house with the bk after the short sale. That way he will have a short sale on his credit versus a foreclosure. They must realize that short sale or no short sale he is still responsible for the deficiency unless he files BK or settles the account for 85% of the balance (that's what they asked my seller for). Good luck! im kind of on the same boat with one of my deals. They reserve the right but that doesn't mean they will. They could always do the SS and then if BAC tries to pursue them they file BK then. There is a chance they may not, so its worth doing the short sale in my opinion.
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Yea, I actually talked to BAC and they were now saying they would take 40% of the balance to settle, they would remove the verbiage . But when the seller has no extra funds, that seems tough.
Armi Abiera said:I have actually seen a BofA approval without the deficiency verbiage on it. However, the lawyer who negotiated it said the client paid $50k to get it removed. The seller was trying to protect large assets.
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Thanx for eveyone's input so far- it is really helpful
My seller has no assets whatsoever and is only concernd about being open to future judgments.
If and when income does come back , will get garnished. He has another assets
His lawyer is advising him to file ch 13- but he is uninformed becuase ch 13 does not remove your obligatin to repay secured debts - unless a seller first wants to spend big money to track the note to see if the note is really owned by the bank ,it will be considered a secured debt and requires a 3-5 repayment history so ch 13 does not sound like the proper solution anyway,
The attorney handling the closing for the buyer has advised the sellerand his attorney that paragraph 7 in the short sale letter 7 clearly states that he is not responsible for the deficiency so I have to see how this gets resolved.
Paola Lopez De Armentia said:Yea, I actually talked to BAC and they were now saying they would take 40% of the balance to settle, they would remove the verbiage . But when the seller has no extra funds, that seems tough.
Armi Abiera said:I have actually seen a BofA approval without the deficiency verbiage on it. However, the lawyer who negotiated it said the client paid $50k to get it removed. The seller was trying to protect large assets.
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That is exactly the approach I discussed with seller.Thx
Al Goldin said:Thx for your opinion as I share the same idea.
PaolaMarin said:I have never heard of anyone being successful at having them change their verbiage. if the seller is wiling to file BK he can always include the potential liability for the house with the bk after the short sale. That way he will have a short sale on his credit versus a foreclosure. They must realize that short sale or no short sale he is still responsible for the deficiency unless he files BK or settles the account for 85% of the balance (that's what they asked my seller for). Good luck! im kind of on the same boat with one of my deals. They reserve the right but that doesn't mean they will. They could always do the SS and then if BAC tries to pursue them they file BK then. There is a chance they may not, so its worth doing the short sale in my opinion.
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Permalink Reply by Karen Donovan on
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My seller got tagged for a deficiency on the first deal we submitted (over a year ago). She wrote letters, yelled & screamed & BOA escalated to the legal dept. and "tagged" her file. (This was a 2nd home - a condo on the beach.) She claimed they had no assets & husband had lost his job & health problems - all true. BOA wouldn't budge, but then the deal died. Now, a year later (and 3 more buyers later) BOA approved her deal and there was no deficiency in the written acceptance - marked - "N.A." Of course we couldn't believe it. Of course BOA cut the two realtors to 2% commission each and wouldn't budge and then of course the buyers changed their minds at the last minute. - oh well....
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Thats great Karen! Is there any way you can upload the approval letter?
Karen Donovan said:My seller got tagged for a deficiency on the first deal we submitted (over a year ago). She wrote letters, yelled & screamed & BOA escalated to the legal dept. and "tagged" her file. (This was a 2nd home - a condo on the beach.) She claimed they had no assets & husband had lost his job & health problems - all true. BOA wouldn't budge, but then the deal died. Now, a year later (and 3 more buyers later) BOA approved her deal and there was no deficiency in the written acceptance - marked - "N.A." Of course we couldn't believe it. Of course BOA cut the two realtors to 2% commission each and wouldn't budge and then of course the buyers changed their minds at the last minute. - oh well....
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I will try to email it to you!
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Karen:
Very encouraging. Nor I or my seller am going to give up on this deal as there are 2 transactions involved and if it takes longer to get it done and the buyer walks ,I have no issue with that as I can get an offer on this house in 2 days.
Can you get me a copy of the letter showing the change in language? That would be a huge help as well as some idea what dept. you dealt with to circumvent the sohrt sale negotiaqtors who have no decision making ability.
Thanx very much.
Karen Donovan said:I will try to email it to you!
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