2nd loan with BOA - borrower different then the owner of the property
Hello,
I need some help with this transaction and looking forward for suggestions.
I'm representing this seller in a short sale transaction. The 1st loan is with Aurora and we got the approval under HAFA. There is a small line of credit with BOA where Aurora is not willing to pay anything to BOA as the loan is not under the seller's name but under the son. There is only one owner on title (the mother), but the mother allowed the son to get a line of credit with BOA and attached the line of credit to the property. Now, my seller did not signed the Note with BOA and BOA doesn't recognize her as their borrower which it's true as she's not the borrower for the line of credit. The small deed of trust is signed by both (mother and son) but the Note it's signed only by the son. BOA's line of credit is not reflected on the seller's credit report.
We spoke to BOA short sale department and they told us that we should speak to their Foreclosure Department as the short sale department can't help. All they know is that we can submit the short sale package to them but the thing is the son is not in foreclosure but the mom is. They said that they want to get paid on HUD-1 which Aurora said NO. We also asked them to accept and give a promissory note for the balance which the son is willing to sign but they told us that they can't do this. To my understanding the son can't submit request for short sale with BOA as he is not the owner of the property and the mother's short sale package is not acceptable to BOA as the mother is not one of their borrowers.
Any suggestions where should I turn for help? I'm hoping to be able to speak to the right person or department to help us solve this issue. I know it's a little bit unusual to have the 2nd loan without the same borrower but is there any way that I can save the deal?
I fought a lot with Aurora to get my client approved for HAFA only to get stuck with BOA unwilling to cooperate.
Thank you,
Replies to This Discussion
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Permalink Reply by Jeff Payne on
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Maybe you can get BofA to allow the son to agree to keep paying the second in the form of a promissory note?
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Permalink Reply by Juliana Oprea on
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This is what we're trying to do and the son agreed to this option. The problem is that BOA's short sale department told us that they can't help us as the son can't do a short sale as his not the owner of the property and they can't accept the mother's short sale package as she's not one of their borrowers.
They told me to try and talk to their Foreclosure Department but I don't have high expectations from them either as the son is not in foreclosure. I had to send again the authorization form to their Foreclosure Dept as yesterday they told me that they can't see it on their side of the system although the short sale department has it.
Any idea where to call so I speak to someone able to understand the whole situation? I have a seller approved for HAFA and a borrower with a small line of credit ($16k) willing to keep making the payments to BofA but I can't find the right person to understand that by getting the son to keep making the payments through a promissory note would be beneficial to BofA.
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Permalink Reply by Trina Gonzales on
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Geez! I'm really confused as to how the BofA 2nd was even allowed in the 1st place. How could it be secured by real property if the person wasn't the sole owner of the property and debtor to the 1st lien? This one sounds like a scenario to consult a real estate attorney on. It sounds like it's outside of your scope as a realtor. Be careful...
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Have you pulled title? Does the 2nd show up?
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Yes, I pulled the title and the 2nd it's right there. They even told me that the mother got a small line of credit together with the son. I also got a copy of the deed from the title company. The deed is under both names, mother and son, and signed by both. You would not believe that BofA did not include her on the Note, right? It's on title but I don't know how and why they did not include in the Note the owner of the property. Yesterday I spoke with Foreclosure department and they told me that of course the son can't do a short sale as he's not the owner or the property; he's not even on title!!! They said that he should call the Loan department and refinance the line of credit, this time getting an unsecured one. I explained everything to him last night and I'll call this morning one of the loan officers that works for BofA and see what she tells me.
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