Bank of America - Two Strikes and Buyer Walks! - Forum

I got the second approval letter from Bank of America today… That’s right, we are on approval #2- same buyer! This Destin Florida short sale was cleared to close back in February. But why did that approval fail? And why is the game "over"? Strike 1 A few months ago I wrote “Countrywide Approves Short Sale – But Won’t Finance Approved Amount”. The buyer’s mortgage lender was also Countrywide, now Bank of America. They UNDERAPPRAISED his purchase of the Destin condo by $10,000, so he could not close for the approved amount. But Bank of America, the short sale department, did not care, and would work to change the approval despite the fact that their own company would not lend money for the contract price. They closed the file! We had to resubmit a new package with the lower contract price and start all over. Insanity, yes, but the buyer really wanted the property. Strike 2 After three more months waiting for the “new” approval, we got down to final negotiations. The Bank of America representative offered three choices before submitting the file to the investor, Fannie Mae: 1. We cut our commission to 3% 2. The seller agrees to a promissory note for $8000 3. Or the buyer increases his purchase price by $3000. Does that even make sense? It didn’t to me, so I repeated it twice, carefully, to be sure I heard correctly. I also told her since it was a Fannie Mae loan, I could not see how they could reduce commission to under 6%. She re-stated the three options, and I subsequently got the buyer to increase his offer by $3,000. I sent in a contract addendum and a new HUD. Three weeks later I got the happy call. Approved! OOOPS – Not so fast!! The demand letter had the wrong net on it. NONE of the past due HOA fees were included. The net was off by $12,000. “What?! How can this be?!”, I asked the new negotiator who was now mysteriously working the file. He told me Fannie Mae will not pay the past due HOA fees in the amount requested unless the seller agrees to a promissory note. He also said Fannie Mae was limiting seller concessions to 3%. HUHHH??? The first negotiator confused the words "COMMISSION" with "CONCESSION"? I told Negotiator Two that the previous rep misstated facts and options, and that the HUD that was submitted for approval did not come close to the approved net. Normally, a HUD does not go to the investor unless it meets criteria for approval. He did not care. He told me, again, the file will be closed if the buyer does not perform. And I would have to start all over if we wanted any changes on the approval. But before we can even get to Strike 3, the buyer walked. Game over! It's Wendy Wendy Rulnick, Rulnick Realty, Inc. Destin Florida

Hi Robert - I have one that is about to lose the buyer because the approval time is running out too. The file was "closed" in error when Fannie Mae sent out mass refi letters to homeowners, and put a hold on any short sales in process. We lost TWO months on that.... So, sellers will be closer to foreclosure and we will have lost three months on the wasted fiasco.

Robert Painter said:

BOA is the worst ( Especially with Fannie Mae ). They are taking for ever and nobody knows why. We have one with them that it seems everything including the BPO was done, but no one seems to know why or who needs to approve it and we sit in limbo. We were told it might be another 6 months before we get approval because are supposed to be short people in the Fannie Mae Dept. We have escalated the file many time and get no where. We were told to stop escalating the file and see what happens.

We have another Fannie Mae with BOA and I doubt we are going to close that one. The second lean holder has approved it with a BPO 25k lower then BOAs. We had a 3 way with our attorney and BOA and the negotiator was literally laughing on the phone at our attorney. I don't get it. How does a lender with this kind of customer service ever get this large? There are people's futures at stake and we are doing our best to make it a win-win for the bank and for the seller. Yet we have seen time and time that the banks will fight over petty commissions or HOA fees and intern let the house foreclose and cost them soooo much more. I don't get it???? It is extremely frustrating.

Replies

Jeff Payne October 11, 2009 at 4:07am

BofA does struggle with Fannie and Freddie loans. I too have one with HOA fees involved and Fannie is settling for 1/2 of the HOA fees in a promissory note. HOA fees are 8600 past due and Fannie is settling for 4300 prom note over 10 years 5% interest and seller is happy.
Kevin - Greenville, SC October 9, 2009 at 5:50pm

BOA/Countrywide are IDIOTS. I hope everyone that does business votes with thier feet and BOA goes out of business!! I pulled my money out two years ago and encourage my buyers to seek lending elsewhere.
Wendy Rulnick October 8, 2009 at 10:04am

Susan - I may not have the time to tell them. I don't make special phone calls. BUT if they call for more information, I disclose the status.
Susan Neal October 8, 2009 at 8:59am

If you've waited months for an approval, BPO done ages ago, etc, and your buyer walks: do you tell BoA or do you let the process continue while you try to get a substitute buyer? I am just beginning to remarket a great house where my buyers gave up on waiting any longer.
Juanita Simkins August 28, 2009 at 5:36am

If banks were smart (NOT!) they would hire retired, struggling or short sale specialist Realtors to GET THE JOB DONE! Who better than another seasoned Realtor to understand the process?
Andrea Mills August 25, 2009 at 2:05am

It's hard most of the time but I always try to keep in mind that the loss mitigator/paper pusher does get paid at the end of the day no matter what. They do NOT work on commission. They sleep just fine knowing your buyer walked. Like I said, most of the time it's hard to keep that in mind but that's the way it is. These people don't have the slightest clue as to how real estate works.
Wendy Rulnick August 24, 2009 at 2:21am

Hi Robert - I have one that is about to lose the buyer because the approval time is running out too. The file was "closed" in error when Fannie Mae sent out mass refi letters to homeowners, and put a hold on any short sales in process. We lost TWO months on that.... So, sellers will be closer to foreclosure and we will have lost three months on the wasted fiasco.

Robert Painter said:
BOA is the worst ( Especially with Fannie Mae ). They are taking for ever and nobody knows why. We have one with them that it seems everything including the BPO was done, but no one seems to know why or who needs to approve it and we sit in limbo. We were told it might be another 6 months before we get approval because are supposed to be short people in the Fannie Mae Dept. We have escalated the file many time and get no where. We were told to stop escalating the file and see what happens.

We have another Fannie Mae with BOA and I doubt we are going to close that one. The second lean holder has approved it with a BPO 25k lower then BOAs. We had a 3 way with our attorney and BOA and the negotiator was literally laughing on the phone at our attorney. I don't get it. How does a lender with this kind of customer service ever get this large? There are people's futures at stake and we are doing our best to make it a win-win for the bank and for the seller. Yet we have seen time and time that the banks will fight over petty commissions or HOA fees and intern let the house foreclose and cost them soooo much more. I don't get it???? It is extremely frustrating.
Robert Painter August 23, 2009 at 2:56pm

BOA is the worst ( Especially with Fannie Mae ). They are taking for ever and nobody knows why. We have one with them that it seems everything including the BPO was done, but no one seems to know why or who needs to approve it and we sit in limbo. We were told it might be another 6 months before we get approval because are supposed to be short people in the Fannie Mae Dept. We have escalated the file many time and get no where. We were told to stop escalating the file and see what happens.

We have another Fannie Mae with BOA and I doubt we are going to close that one. The second lean holder has approved it with a BPO 25k lower then BOAs. We had a 3 way with our attorney and BOA and the negotiator was literally laughing on the phone at our attorney. I don't get it. How does a lender with this kind of customer service ever get this large? There are people's futures at stake and we are doing our best to make it a win-win for the bank and for the seller. Yet we have seen time and time that the banks will fight over petty commissions or HOA fees and intern let the house foreclose and cost them soooo much more. I don't get it???? It is extremely frustrating.
Wendy Rulnick August 23, 2009 at 6:48am

Sharon - I sincerely think the first negotiator could not speak English well. That is my conclusion, thus mis-translated words. The buyer walked... The condo HOA, still controlled by the developer, will not waiver on wanting now 14,000 in past due HOA. My strategy is to re-sell the unit - new board takes over in October. They won't have ulterior motives in keeping the past due HOA so high, and will probably take a settlement to get a cash infusion.

Sharon Simms said:
Bank of America has been one of the most difficult to deal with. Interesting that they didn't respond to your comment on FNMA instructing them not to reduce the negotiated commission below 3%. What about going directy to FNMA? It may be too late for this transaction, but could help the next one.
Sharon Simms August 23, 2009 at 6:41am

Bank of America has been one of the most difficult to deal with. Interesting that they didn't respond to your comment on FNMA instructing them not to reduce the negotiated commission below 3%. What about going directy to FNMA? It may be too late for this transaction, but could help the next one.

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