Replies to This Discussion

Permalink Reply by joe beauchamp on August 18, 2010 at 5:33am

It's rare. I can't recall if I ever got BofA to pay out more to a 2nd than the investor guidelines - I think so but that would have been one where they were considerable over their net. That isn't exactly your question, but your question leads nowhere. Yes, I've frequently had them pay out more than $3K. Most of mine are fannie mae, their guideline is 8% up to some number like $5K (I don't recall).

You are in the typical bind - the 1st will not pay out more - presumably, they base their numbers on what it will save them to not go through foreclosure and what 2nd liens are willing to take to go away. If the 2nd is a collector type company, that is the worst. They bought the debt for pennies - they push real hard, they also play the odds - those odds are that SOMEONE will come up with the money more likely than let it go to foreclosure - they take into account that sometimes it doesn't work, so if they seem to be oblivious to them losing everything as this goes to foreclosure, they've already calculated, as a company, that overall, they win with this strong position, unfortunately. Negotiators for the 2nd in this case can make a huge difference. Some are real pinheads and you need to point out how his boss is going to feel when he loses the money he could have had because he wants too much, etc.

It's often a tough situation. Generally, you'll need to find someone who will come up with some money to appease the 2nd because BofA almost never will do so. They have their guidelines and, unlike most other banks, they don't care if the investor loses or the SS goes away, they just keep arranging the deck chairs on the titanic for the investor.

You should hammer on the 2nd, but you need to expect that you have to come up with some extra money to pay them. Although it is a constitutional right of the seller to pay his bills, BofA WILL object to the seller paying that extra amount directly. They will disallow that on the HUD and would rather have a foreclosure. I think that goes back to basic bank mentality, no matter how good the deal is for them, if someone else is making decent money, they will kill it - mentally, all profits should go to them, so far as banks are concerned. (Yes, I personally lost a good house deal where I was even going to gift $40K to the buyers (hence safer deal for the bank) but the bank refused because I was going to make $20K on the deal - sometimes, a calculator has nothing to do with bank thinking...)

Permalink Reply by Patti Berube on August 18, 2010 at 5:42am

Oh man - these banks are SOOOO short sighted. I just got off the phone with the second and he's come down a bit on what he said he had to have, but we're still about $1800 apart. I've thrown in $750 and the other agent $500 - but I suspect we'll need to do more(as you've noted) to get the deal done!
Thanks for your feedback, I REALLY appreciate it!

joe beauchamp said:

It's rare. I can't recall if I ever got BofA to pay out more to a 2nd than the investor guidelines - I think so but that would have been one where they were considerable over their net. That isn't exactly your question, but your question leads nowhere. Yes, I've frequently had them pay out more than $3K. Most of mine are fannie mae, their guideline is 8% up to some number like $5K (I don't recall).

You are in the typical bind - the 1st will not pay out more - presumably, they base their numbers on what it will save them to not go through foreclosure and what 2nd liens are willing to take to go away. If the 2nd is a collector type company, that is the worst. They bought the debt for pennies - they push real hard, they also play the odds - those odds are that SOMEONE will come up with the money more likely than let it go to foreclosure - they take into account that sometimes it doesn't work, so if they seem to be oblivious to them losing everything as this goes to foreclosure, they've already calculated, as a company, that overall, they win with this strong position, unfortunately. Negotiators for the 2nd in this case can make a huge difference. Some are real pinheads and you need to point out how his boss is going to feel when he loses the money he could have had because he wants too much, etc.

It's often a tough situation. Generally, you'll need to find someone who will come up with some money to appease the 2nd because BofA almost never will do so. They have their guidelines and, unlike most other banks, they don't care if the investor loses or the SS goes away, they just keep arranging the deck chairs on the titanic for the investor.

You should hammer on the 2nd, but you need to expect that you have to come up with some extra money to pay them. Although it is a constitutional right of the seller to pay his bills, BofA WILL object to the seller paying that extra amount directly. They will disallow that on the HUD and would rather have a foreclosure. I think that goes back to basic bank mentality, no matter how good the deal is for them, if someone else is making decent money, they will kill it - mentally, all profits should go to them, so far as banks are concerned. (Yes, I personally lost a good house deal where I was even going to gift $40K to the buyers (hence safer deal for the bank) but the bank refused because I was going to make $20K on the deal - sometimes, a calculator has nothing to do with bank thinking...)

Permalink Reply by joe beauchamp on August 18, 2010 at 6:05am

Another item, if you know how bill collectors work, lying, psychological pressures, etc., then you are in a better position to deal with these 2nd's. They frequently will delay before their demands. Why? Let's see, it is 4 days before your closing, you have the OK from the 1st and they want an extra $4K. A good time for you to decide that maybe you'd rather get something for your work than lose it all. If they demanded this 3 months earlier, you'd tell them to take a leap and walk away. Not when you are 3 minutes from getting something for all your work. So, beware of that tactic -- like, for instance, if you get a number from these people, get it in writing NOW. That last particular tactic is not usual for a bill collector - they don't have a nice deadline to work with, they just want your money. Other than that, you can expect all the other tactics from them. Don't expect honor or ethics or morals from them - get it in writing, etc.

Patti Berube said:

Oh man - these banks are SOOOO short sighted. I just got off the phone with the second and he's come down a bit on what he said he had to have, but we're still about $1800 apart. I've thrown in $750 and the other agent $500 - but I suspect we'll need to do more(as you've noted) to get the deal done!
Thanks for your feedback, I REALLY appreciate it!

joe beauchamp said:

It's rare. I can't recall if I ever got BofA to pay out more to a 2nd than the investor guidelines - I think so but that would have been one where they were considerable over their net. That isn't exactly your question, but your question leads nowhere. Yes, I've frequently had them pay out more than $3K. Most of mine are fannie mae, their guideline is 8% up to some number like $5K (I don't recall).

You are in the typical bind - the 1st will not pay out more - presumably, they base their numbers on what it will save them to not go through foreclosure and what 2nd liens are willing to take to go away. If the 2nd is a collector type company, that is the worst. They bought the debt for pennies - they push real hard, they also play the odds - those odds are that SOMEONE will come up with the money more likely than let it go to foreclosure - they take into account that sometimes it doesn't work, so if they seem to be oblivious to them losing everything as this goes to foreclosure, they've already calculated, as a company, that overall, they win with this strong position, unfortunately. Negotiators for the 2nd in this case can make a huge difference. Some are real pinheads and you need to point out how his boss is going to feel when he loses the money he could have had because he wants too much, etc.

It's often a tough situation. Generally, you'll need to find someone who will come up with some money to appease the 2nd because BofA almost never will do so. They have their guidelines and, unlike most other banks, they don't care if the investor loses or the SS goes away, they just keep arranging the deck chairs on the titanic for the investor.

You should hammer on the 2nd, but you need to expect that you have to come up with some extra money to pay them. Although it is a constitutional right of the seller to pay his bills, BofA WILL object to the seller paying that extra amount directly. They will disallow that on the HUD and would rather have a foreclosure. I think that goes back to basic bank mentality, no matter how good the deal is for them, if someone else is making decent money, they will kill it - mentally, all profits should go to them, so far as banks are concerned. (Yes, I personally lost a good house deal where I was even going to gift $40K to the buyers (hence safer deal for the bank) but the bank refused because I was going to make $20K on the deal - sometimes, a calculator has nothing to do with bank thinking...)

Permalink Reply by Sara Mehrpouyan Los Angeles CDPE on August 18, 2010 at 10:41am

I am or was (still not sure) working on a short sale where BOA would only give GMAC $3000. GMAC was also charged off and wants $13k. BOA would not budge. So, yes the money will have to come from somewhere else. Joe, if the buyer contributes towards the 2nd on the HUD, will BOA allow that?

Permalink Reply by Laura Marshall on August 18, 2010 at 12:11pm

Hi. I have had no problem with B of a...regarding buyer contribution to 2nd td. Just make sure it is on the buyers side of the HUD, and not a credit on the sellers side. I just closed one where the buyer contributed $12,000. Good Luck!

Sara Mehrpouyan CDPE said:

I am or was (still not sure) working on a short sale where BOA would only give GMAC $3000. GMAC was also charged off and wants $13k. BOA would not budge. So, yes the money will have to come from somewhere else. Joe, if the buyer contributes towards the 2nd on the HUD, will BOA allow that?

Permalink Reply by joe beauchamp on August 19, 2010 at 9:27am

yep - but you have funky different people at BofA. Some require it as POC (paid outside of closing) so no numbers need show up, others, as mentioned, want other things on the buyer's side (we had issues with the buyer's loan company on that one). BofA concentrates on the seller's side. I can see some manager there complaining about the buyer paying to the 2nd, just because they do pinhead things. But, no matter what their complaint is, you will get them to see the light.

I've spent (way too much) time talking to them on what is acceptable to them - but that is the fastest way to get to where you need to be - semantics...

Sara Mehrpouyan CDPE said:

I am or was (still not sure) working on a short sale where BOA would only give GMAC $3000. GMAC was also charged off and wants $13k. BOA would not budge. So, yes the money will have to come from somewhere else. Joe, if the buyer contributes towards the 2nd on the HUD, will BOA allow that?

Permalink Reply by Sara Mehrpouyan Los Angeles CDPE on August 19, 2010 at 9:37am

BOA is strange indeed. It's definitely a battle.

Permalink Reply by Denise Forsyth on August 23, 2010 at 12:05pm

Hi Patti,
I had a transaction where BOA was 1st and a local credit union was 2nd. $3000.00 was offered to the second on a 50,000 amount. The second came back and wanted 10,000, I pushed for 12,000 from Bank of America, and offered 5,000 to the second, they both settled for 8500.00. I have had other transactions lately that I have been able to get the 1st to pay up to 22,000 to a second. Dont give up just keep hammering them!