Replies to This Discussion

Permalink Reply by Bruce Dennis on October 31, 2013 at 3:15am

During my divorce I faced a similar issue. Mortgage companies don't have a lot of experience with dealing with divorce issues. First you have to make a distinction with the deed / ownership and the loan / debtors. The judge can award the property to one of the parties but that changes only the ownership. The mortgage debt is still an obligation to the parties that signed the note. One party will still have the debt obligation but no ownership. All parties that signed the note should sign the short sale paperwork. Just to be safe , the bank will also make any person on the deed sign all documents  as well. Each state has different divorce laws and banks/servicers are being overcautious. The outcome of the short sale should not be affected in any way due to this if the court approved this during the divorce. One thing you may want to have the sellers look at is the potential tax liability of the non- occupying person. 

Permalink Reply by Bruce Dennis on October 31, 2013 at 11:12am

Ron thanks for your reply. If the disagreement is to rather the servicer or the people are more knowledgeable about divorce is the issue, we have gotten off of a productive path and it is of no consequence to the solution to the problem. You confirmed the information (please reread my statement for clarity) that I gave and hopefully our information helped someone.

Permalink Reply by Donna Clayton, Broker, MBA on October 31, 2013 at 3:21am

Hi Stacy,

If wife was on the original mortgage, then a quit claim deed would not relieve her of the mortgage obligation.  Bet even if she was not originally on the mortgage, this stuff sometimes goes beyond logic - especially when your dealing with BofA.  I'd say if all they want is the addendum, and no additional financials, etc on the wife, just give it to them since its a relatively innocuous demand.  Good luck and let us know how it goes!

Permalink Reply by Michael Hayley on October 31, 2013 at 4:49am

I say give them what they want, with a smile, ...unless there are legal consequences. Ive had success just by going with the flow. You want this... here it is, Sir! 

Permalink Reply by Thom Colby CA Brkr 888-391-5245 on October 31, 2013 at 9:18am

Have you read the "NOTE" ?  I expect there is a clause defining how title can be changed / transferred and likely it was prohibited.  As someone else said, the Divorce Decree cannot release either party from the actual DEBT to the lender.

You may never get this closed unless the lender states exactly what they want AND the "exes" have their attorneys work on it.  Don't do it without an attorney.

Best of luck !

Permalink Reply by Stacy Magid on October 31, 2013 at 10:55am

So we sent the addendum that they requested adding the ex-wife to the contract (even though she is no longer on the deed) with all buyer and sellers signatures and now they want to speak with this ex-wife directly.  I have closed a few short sales with divorce situations and this by far is the worst experience ever.  It should never be this difficult!

Its almost like they are trying to find a reason t decline the file so it will go to foreclosure!

Permalink Reply by Bruce Dennis on October 31, 2013 at 11:26am

As someone said earlier, just go with the flow and give them what they want. It can be frustrating but you are helping someone get rid of a burden and helping someone else buy a new home. You even get paid for your services. Keep your chin up and provide what they are asking for.

Permalink Reply by joe beauchamp on October 31, 2013 at 12:11pm

The bank makes money on keeping accounts - the investor pays them monthly. They make extra money for every step of a foreclosure (which will likely be years later) then they get the property back as an REO and continue getting monthly money from the investor. Their incentive is to drag out and kill every deal. You need to accept that and work around it. Don't let it frustrate you, it is what they want. You have 2 levels at the bank for problems, incompetence (like demanding the wife on the sales contract) and uncaring imposition. Neither punished and BofA rewarded. Knowing that can help you cope - you won't keep saying things like, "don't they have a conscience?", "don't they see this is a great deal?" No and not to them. Just keep plugging away. You should get there.

Permalink Reply by joe beauchamp on October 31, 2013 at 12:00pm

Basically, BofA has no interest in getting short sales completed. You first ran into the 3 stooge low level patrol - regardless of what the decree said, they wanted the right color of what you submitted - absurd, but these people only focus on crossing t's, etc. You didn't say why they are ignoring the divorce decree, but I can tell you that big banks ignore courts a lot and they just don't care.

Likely, you have something where the judge said the house goes to husband. You'd think that there never was a divorce before that these learned people are incapable of making the decision clear to other learned people such as bank lawyers but only understandable to the unwashed people. The house goes to the husband. BofA lawyers, for the 100,000th time, are saying, but what does that mean? Does that mean that the husband can live there and the wife must pay the mortgage or what? We've never seen a divorce before. So, the usual response from the bank is to totally ignore the judge. Happens all the time.

It's comical that the bank insists upon the wife being on sales agreement, but it is understandable that the low level pinhead has a note and mortgage with both names, therefore no matter what is legal, they will insist upon both for a sale (the rules from their mgr says get both signatures - braindead). If BofA made money on these sales, you bet they would figure things out and make it happen, but they don't, so they just happily drag their knuckles.

I think to the bank's credit, divorce courts should see that they are causing these problems over and over because they don't have real communications with the bank. What would it really take for the divorce court to have/send a document to the bank stating who is responsible for the mortgage(s) and who is responsible for the note(s)? Oh, about nothing. But they don't The judge usually just has something like the house is awarded to the husband - OK, what about the note, what about the mortgage, what about credit history? Only a logical lay person would understand - bank lawyers are at a loss. This is standard operation for courts and banks. It just becomes more frustrating when you throw in the monkeys demanding a picture of a state seal instead of having someone at least look at the content to see it if matters.

I would put in a complaint to the OCC about the handling of the decree. BofA can't justify demanding a seal picture to then turn around and say it doesn't matter anyway. How is that anything but a stall tactic? And I'd complain that they refuse a legal quit claim, etc. That, again, is due to ignorance or arrogance on BofA's part. They really don't care and are just fine with dragging it out until the buyer walks.

Depending upon who your investor is, you might get some help and traction from them. It is in their best interest to have BofA do its job.

With absurd things, I will object but often expect it to make no difference. Anything that I can do to accommodate the "specialist", I will do. They want it on pink paper? OK. They want the middle name of the 3rd cousin related to the husband, OK. Plenty of dumb stuff, but you have the "specialists" asking for these with no idea why except they got some list from their manager and you have the few people who actually look at the important items in the documents. You want to minimize frustration and get to that 2nd person asap.

Still, a complaint to the OCC and possibly the investor would help you and future agents being needlessly jerked around by both the incompetent and the uncaring.

Permalink Reply by Jeff Payne on November 1, 2013 at 1:33am

If you read between the lines, Joes post makes 100% sense

Permalink Reply by Stacy Magid on November 1, 2013 at 2:17am

Another update:  Bank of America is still fighting the short sale.  Now they are requiring a letter from the seller's attorney basically stating that she is not contesting the short sale. This is even after the addendum adding the ex-wife to the contract as seller. It appears that they are worried that the seller may sue Bank of America since there is still something open on the file with the divorce.  Its a CYA kinda thing but you have to wonder whats next once they get this....

Permalink Reply by Thom Colby CA Brkr 888-391-5245 on November 2, 2013 at 5:39am

It will be interesting when / if it does get sold.  I expect the ex-wife will receive a 1099 for the forgiven debt just like the ex-husband.  Will she understand that before she agrees to proceed?