Buyer of a BOA Short Sale with 2 liens
So I posted back in march about a house that we put a bid on that was a BOA short sale and after 5 months of waiting the bank countered with a ridiculous price so we backed out.
We started looking at houses again 2 months after backing out and of course we found one that was even better than the other one so our agent looked into it and low and behold its a BOA short sale and the biggest kicker is it has 2 liens on the house 1st mortgage is BOA and 2nd is Chase! Now we had such a bad experience with the last short sale I have no idea why we even went down this road again BUT we absolutely love the house so of course we put a bid on it! Plus the sellers agent told our agent that there were previous buyers and they got their offer approved within 2 months but something on the buyers end went wrong and they couldn't close so we I guess hoped that we would get the same kind of response! The house is listed at 180k we put a bid for 175k! So here is a little background:
Submitted Bid on 11/14 sellers accepted right away and it was submitted to the bank the next day.
I am confused about this next part and would like a little help understanding this:
Sellers Agent submitted offer to Chase (2nd lien holder) which we were unaware of at the time! I don't understand why they submitted to the 2nd lien holder first? Chase had the BPO done the very next day!
Now since I am now very experienced with trying to buy a BOA short sale I knew not to hound my agent or sellers agent cause i knew it would be a while but to my amazement my agent called on 12/23/11 to tell us the bank accepted our offer and they want to close 1/30/12. This is now where we found out that it was Chase not BOA! I asked why they submitted to chase first and my agent didn't have an answer for it. The sellers agent told our agent that they were going to submit to BOA on 12/26/11 (because of the holiday)! And she was saying they should have an approval in 2 weeks.........I took that with a grain of salt because of my experience but i figured maybe she knew what she was talking about since she already had a previous acceptance!
Our last update was last week 1/12/12 my agent called to tell us the sellers agent was a little too optimistic cause they haven't even ordered the BPO yet!
My questions are:
1) Why would they submit to chase first? And why didn't they submit to BOA at the same time why did they wait till chase gave an approval?
2) Also chase wants to close on 1/30 but obviously there is no way to do that so what happens? Will we have to start the SS process with Chase all over again?
Any answers or input is greatly appreciated!!!
Replies to This Discussion
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Permalink Reply by Richard Kirk on
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Hi Deena---i usually submit to both lien holders at or around the same time...Sometimes the second could take just as long as the first. You were lucky here---almost too lucky. My guess is that Chase will probably extend the approval another 30 days. A second extension may not be so easy. You're probably a good 30 days or more away from the BOA approval. It seems like what they did wrong was really dropping the ball on submitting the deal to BOA so late (over 30 days!). They really goofed. Hang in there and good luck.
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Permalink Reply by Deena H on
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Thanks so much for your input!!!
Yes my agent did tell me they thought that they would have issues with getting chase to approve but they are so very optimistic with BOA whereas I am NOT! My agent forwards all the emails from the sellers agent to me and I went over them again after reading your reply! This is what it states:
"Chase DID accept all terms-they are the 2nd. So the second did accept and now it goes to the first (BofA) for approval. It was always the 2nd we were worried about becasue normally the 2nd wants to hear with the first is doing first. Bank of America has all the paperwork and our attorney said she will work VERY diligently on it next week letting them know the 2nd approved and we need their approval. Hoping to hear something back in 2 weeks!"
It's a little confusing but it sounded to me like they waited to submit to BOA, but if I am wrong and they did submit when we first offered back in novemeber does it really take 2 months to get a BPO done?
And Actually I screwed up when I said we put an offer in on 11/14 it was actually 11/4!!!
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Permalink Reply by Mary M. Bremer on
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Ok, my 2 cents.
If they really had received an approval from BOA for the short sale with the previous buyer....then they would have copies of all the correpondence etc.
So, moving to your deal AND knowing what BOA had previously approved...Maybe they thought let's go to Chase and negotiate the 2nd lien first this time around. Don't forget, they already knew that BOA would allow Chase to have "x" amount of dollars (based on the old offer).
make that 1 cent....
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My agent said the reason is no matter what the short sale offer was like before or what the bpo was before they start from scratch with every new offer yes they probably knew from experience to go to chase first but the listing agent I feel like told us a bogus story about a previous offer cause she sounds like she is surprised that chase answered so quickly!! Thank you for the 2 cents!!
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Deena - I need to earn those cents.
Yes, BPO gets reordered. You get a new BPO and new negotiator, but the investor is the same (which is the one constant). The investor is the one that will dictate what the second lienholder will get. So if the investor said Chase gets "x" amount the first time that usually stays the same on the future negotiations.
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Oooohhhh!!! Okkkkk!! I'm sorry I misunderstood originally I do understand what you are saying now!!!
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Noooooooo problem. Keep the faith. BOA is funny. It depends on the negoiator. If you get a decent negotiator, you will be able to get it done within a month.
It really does sound like they got a good negotiator/communicator at Chase. Which is good, because that means that the selling agent MAY be able to stall until BOA get's their job done.
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Permalink Reply by Thom Colby CA Brkr 888-391-5245 on
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Deena -
Why didn't YOUR agent know there were 2 loans at the time / before you made the offer?
It's likely the Listing Agent believes they will have some leverage with an approval from Chase in hand to provide along with your offer to BofA to hurry them along. Also, not knowing where in the process of Collections Chase was in, it was probably a good move since it should likely keep the Chase loan out of the Recovery Dept (Collections) and it should be able to be settled for a "reasonable" amount. Have you been provided a copy of the Chase Approval as yet? - you should.....
Best of luck - it seems like this will move along pretty well.
Thom Colby
Broker
Palm Desert / Newport Beach CA
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Not sure I might have wrote it a little confusing but yes our agent did know there were 2 liens on the house prior to us submitting our bid we did it anyway because the listing agent had told my agent that the last offer was approved in 2 months so we gave it a shot anyway!!
It actually was told to us that the sellers are still paying the 2nd mortgage and not the first (bofa) which my agent thought was pretty weird, but they are actually not in default at all with chase!!!
Yes we did receive the approval letter from chase!!!
Thanks so much I hope it does go smoother than last time!! -
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...paying the 2nd lien is really great because if they are delinquent, the loan could be written off or, sold to a collector. That's when the real pain begins. Sounds like Listing Agent is doing the right thing to me (now it's 3 cents).
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Hahaha yes definitely earned your 2/3 cents!!! Ok so that's a good thing cause my agent was confused and didn't get why they were still paying on that!!! So everything that has been done is actually correct my agent kind of had me thinking that they were doing things backwards!!
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Haha. Well, there is never a right and wrong way doing short sales since none of them are the same. Typically, I always start with the first lender so that I can find out what they will ALLOW the 2nd lender to get (which is what your agent said). Then I go to the 2nd lender. 2nd lender processing is a shorter process and typically takes less time.
But in this case, they had already determined what BOA's guidelines were going to be for the 2nd lender. They probably sent the ss packages simultaneously and Chase got it done too fast. So, let's they can't get the BOA file ready in time and they cannot extend the Chase deal. Then what will happen is that they will wait for BOA to approve, THEN they will go to Chase. Based on Chase's super quick turn around, it will get done in time. Ok, I'm at a nickel.
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