B of A BPO Outrageous
I'm an end buyer that's been thru the wringer like most buyers of B of A short sales. It's been 6 1/2 months now. We started the old way, then Equator, then Titanium (Freddie Mac), and now back to Equator. I got a lot of good info off this site and helped the listing agent get some movement awhile ago. I told him to do the OCC complaint trick and he got some calls from management. Then nothing happened for a week or so, so I filed an OCC and BBB complaint myself. I hear they didn't like that but the way I see it is we're ALL pissed off now so maybe something will get done.
I'm a first-time homebuyer in California and so I want bank approval before April 30th because anyone expecting to get that money with just a short sale after that date is taking a big chance. I will be putting a contract on at least one REO shortly as insurance.
Anyway, I offered $240k back in Sept 09 and they came back with the second BPO today of $295k. In the area I live in there hasn't been a house that sold for over that in over a year and it was a new house. In fact, the county I live in is the 14th worst in the whole country economically speaking. The listing agent was also upset with the BPO and told B of A to do another one but they are refusing. There are 2 liens: 1st (B of A) for $284K and 2nd (Citi) for $100k. Since unfortunately they know I'm a first-time homebuyer they may be just trying to see if they can get the $8k from me.
I was talking to my mortgage broker and he suggested that I do an FHA appraisal for 2 reasons. The first being something I can counter with and the second reason is that it locks the house in at that price for all FHA buyers. So in otherwords, once I disclose the FHA appraisal amount the bank is not going to get any more than the appraisal amount as long as it's an FHA loan.
Either the bank has decided that I'm not getting this house or it may be one of those houses that will make the investors more money as a foreclosure. I already talked off the record with an FHA appraiser in the area and he said my price of $240k was inline with the comps.
I'll suggest to the listing agent to contact some of the B of A execs he talked to a few weeks ago.
Any other ideas would be greatly appreciated.
Thanks,
Tim
Replies to This Discussion
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Permalink Reply by Jeff Payne on
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First things first, you want the homebuyer tax credit......... did the seller already agree to sell the home to you? I assume since the offer was submitted to BofA that the seller agreed. The bank is not party to the contract and they do not need to agree by April 30 to get the tax credit.
The biggest issue here is disputing the BPO, that can take some time. The listing agent needs to do this by escalating the file to management, he will need proof before he does this, an appraisal would really work better than anything else.
I do not really agree with your mortgage broker, an FHA appraisal is not going to sway them any more than any other appraisal, rememeber that the appraisal is to establish fair market value today and could change in another 3 months depending on the market, especially a declining market. It looks like you won't have any problem showing the value of your home is inline with your offer. An FHA appraisal is not going to lock anyone into anything in terms of the short sale.
Another issue is that there is a second mortgage............has this one been approved? this can also take some time.
Have the listing agent escalate the file, he may have to get to the investor on this one, do you know who the investor is?
At this point, you have a few choices, pay the amount of the BPO (not likely), get the bank to do a new BPO (best scenario) and wait it out, or find another home... -
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Permalink Reply by Tim Harrison on
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Jeff, thanks for the help!
I live in a rural area and unfortunately the realtors aren't up to speed with short sales. The file was with Titanium so I'm assuming the investor is Freddie Mac at least for the first lien. They're only allowing $3000 to the 2nd lien (Citi) or investor. I asked the listing agent if he knew who the investor was and he didn't. He's under the assumption that B of A is handling negotiations for the 2nd lien also which could be wrong.
I found out today that the BPO ($295k) was done by a local realtor so B of A is calling it legit and the listing agent got no help from a supervisor. The area I live in is a gated community of approx. 2200 homes and there have been only 2 houses that have sold for over $280k in the last year. What we're going to do is accept the offer and get an appraisal done. The apprasial should come in lower and therefore trump the BPO. I'll then let them know that the appraisal amount is all I can get a loan for and see what they say. Even if the appraisal comes in higher than I like I can always walk during the inspection period.
As far as the first-time home buyer deadline, I understand that I already have a binding contract. My point was it's pretty foolish for someone wanting the $8k credit to go past that deadline counting on just a short sale. Since short sales can fall apart on closing day just imagine what banks may do to first-time buyers if their closing is on June 30th? Not a good place to be.
The appraisal should be done by early next week so that will be the turning (or walking) point.
Thanks again,
Tim -
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Permalink Reply by Sam Purtle on
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Tim
Wow what a nightmare. A lot of BPO agents in my area are in it for quantity not quality and I think that all of us have had a deal go south over an incorrect BPO value. It is one reason the listing agents should always meet the BPO agent and present their case along with comps (although these are limited in your area). I hope the FHA appraisal route works and hope you post the results here so we can all learn something.
The other issue I think I read is that BofA is allowing $3000 to the 2nd (Citi) and no one has negotiated this with them. Bank of America is not going to negotiate with junior lien holders. It is the responsibility of the short sale negotiator ( I assume the listing agent) to pursue a short sale with Citi and this could takes months as well especially if no one has started discussions with them yet. Before spending money on an appraisal, I would verify that the short sale is being negotiated with the 2nd lien holder and that they are close to providing a short payoff demand letter to the listing agent.
Just my two cents.
Sam -
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