BOA won't waive deficiency verbiage in Non Recourse state then sells property after auction as an REO for 50K less?

I would like to share one of my recent stories as I feel this was wrong and I KNOW the investor couldn't have seen this file and chosen this result.'

I have been doing short sales now over 4 years. I have closed every single one I have ever negotiated until this last one and it really gets my blood boiling.. I was hoping to hear if anyone else has experienced something similar.

I had a client who had a cash out refinance loan with BOA. Just one mortgage. I had the home listed and we got a full price offer at $189,900. It was submitted to the bank along with all the supporting documents. The short sale was approved, however the letter came with BOA's normal deficiency verbiage. I notified BOA that WA was a non recourse state and that he would only move forward with the short sale if they waived this verbiage. I HAVE personally been able to get them to waive in the past so I KNOW it is possible. I have the letter to prove it.

But they told me because it was non purchase money they couldn't waive this right. They asked me if I wanted to move forward or close out the file. I tried and tried to get them to remove it, but in WA it was better for my client to foreclose than waive his right to something he already had under non judicial foreclosure, so we told them to close out the short sale.

They closed it out, but their decline letter said the reason it was declined was "Buyer Walked"... which was NOT true. I asked why they selected that and of course no one responded.

So I watched the property foreclose and no one bid on it at the auction block, one month later BOA listed it with a bank repo agent for 50K less than our offer... It made me soo angry. How could an investor chose to eat that much money over verbiage. My client was on unemployment and all. It just didn't make sense. They didn't save ANY money by foreclosing and ended up spending more and losing more...

Seems silly to me. And I feel that their letter was fraud stating a decline reason that was untrue... I think this goes along with their foreclosure freeze, it either never really got to the right person or ????. It was all in equator so I hope someone goes back and reads through it... =-(

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Replies to This Discussion

I have a very good contact @ Bank of America, that you should call and email. This is totally wrong!!!
Allen J. Seelenbinder Portfolio Retention manager West Vice president (419) 392-3487 email [email protected]
Good Luck!!
Christina


Christina o'Brien said:
I have a very good contact @ Bank of America, that you should call and email. This is totally wrong!!!
Allen J. Seelenbinder Portfolio Retention manager West Vice president (419) 392-3487 begin_of_the_skype_highlighting              (419) 392-3487      end_of_the_skype_highlighting email [email protected]
Good Luck!!
Christina
Jessica,
You're a star! Try not to let this get to you, you did the right thing. In the end, B of A lost money for the investor. If you had the investor's name, I'd send a letter there. And your congressman. "Buyer Walked" is down right deceptive, fraudulent, and falsified to me.
Hi Jessica,

I am in Arizona which is an anti deficiency state which I am guessing is the same as a non recourse state such as Washington. We hand several BOA short sale transactions where this issue has come up. Our laws clearly state that Anti Deficiency does not apply Non Purchase money/ cash out refinances where by money received from the refi was used to off credit cards or buys a new car or boat. Then it goes into tax law which states any money used to improve the property will not be taxed as ordinary income. BOA will not waive the deficiency language on a non purchase money mortgage due to these factors.

I have first hand knowledge of this. My husband and I had a short sale in 08 (when short sales were not vogue) with a purchase money mortgage from GMAC (who was wonderful). Although, they did not have a letter stating they were coming back to us for the deficiency amount the omission of the language is not a guarantee they won't come after us. This cloud of deficiency is now hanging over our heads for the next 4 years (was 6 years) and we were taxed on the money we used from the refi to payoff credit cards.


Of course I do not know if this is truly the case in your situation, but this is what we have been experiencing here in AZ and with BOA non purchase money mortgages.
I had one after that that was not a cash out refinance and was an actual purchase money loan.... and they closed it out for the same reason. The only difference between these 2 and the one where I was able to get the verbiage waived was that person had mortgage insurance...??? The most recent one didn't have an auction date so I reinitiated it and started all over again. =) I figure I won't give up until I have to. =) LOL

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