I'm trying to buy a house that is on a short sale. I'm having to deal with Bank of America. I'm really confused on the whole thing and why it is taking so long. I summited my offer back on January 24. Since that time the realtor has told me many times that it is moving through the process. Supposably it has already gone through the underwriting thing and is waiting for final approve from the bank. In the last five months I have had to sign more and more of the same paper work as well as resign everything I have already submitted. I just don't understand why I haven't heard anything yet about them accepting, rejecting, or counter offer on my offer. I'm so lost. I guess technically they still haven't accepted my offer. I kind of would just like to know it they will or not. I need a place to live. The last thing is the bank or someone I'm not sure who, but they told the realtor what price to put on the house. I offered what they said they wanted. I didn't go any lower. Also I'm paying cash for the house so there's none of that problem of getting a loan and stuff. To me this seems like it shouldn't have taken this long. I just don't understand. It seems like it should be a done deal. I offer what they want I give them cash it's over. The thing that is eating at me and making me very upset is that I keep hearing dates that we will close on this date and those days have come and gone a few times now. Every time I think I'm about to move they push the date back another month or two.
Can anyone explain this process to me and any recommendation on how to maybe move this along. I'm so lost on what is going on.
Robert
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If it's a Bank Of America, on Equator, the agent should be able to at least get a "snapshot" of what's happening on the Equator system. Your contract should tell you when you are closing, although they are sometimes open ended. Many times on a short sale the contract states on or before 45 days of lien holder approval. So, it doesn't sound as though you have been given lien holder approval. The Title Company can also tell you how many liens are on the property. We always do a preliminary report on all files so we aren't surprised late in the game. As far as doing the paperwork over, again and again, it's a good and bad thing. BOA has gone through a lot of changes to improve their system, unfortunately, they aren't grandfathering active files. So, recently they have added a lot of new documents, and changed a few. I'm guessing you are stuck between the old and new system. I'm seeing this on one of my older short sales also.
Yes the Equator system is good but does not include the VA or FHA loans at this time. In California with the purchase contracts, we use a short sale addendum that extends the time frame to start all time frames after the lender or lenders have approved the short sale. They can be as short as 45 days or as long as 6 months it depends on the Seller whether they are cooperating with the lenders, the negotiator that you get, and the agents involved in the transaction.
I agree Janis, having a title report upfront helps to see if there are any additional liens on the property.
We found three liens on the short sale that we are currently working on, I finally have approval on all three and if all goes well should close next month.
Robert,
I am also a buyer of a short sale. Our offer was written and accepted by the seller on Nov. 17 2011. It took the bank 3 months to let the owner know they would let her do a short sale and we did not receive the short sale approval letter until 2 weeks ago.May 18th. So now it has been 6 1/2 months. We were supposed to close on June 5th but it was pushed to July 2nd because she has tax liens on the property. The whole short sale experience has been one of the most stressful awful situations we have ever gone through. The wait is excruciating...every day waiting and waiting it is torture. I would not recommend this process for anyone. I sympathize with what you are going through. Unfortunately there seems to be no rhyme or reason why ours took so long...I hope for your sake you hear something soon. We were dealing with Bof A as well in Southern California....I don't know if the location matters as to the timing. The price is probably not the issue it is probably some other factor that is delaying it and you'll probably never know what that it is....Anyways good luck...keep us updated
Hi Robert,
From what you are saying I am understanding there are two loans on the property, the first loan with Bank of America and a second loan that the sellers took out for remodeling the home.
The process is always a little harder with two loans even if they are from the same bank, there will be two negotiators that the Listing agent must get approval from before they will release the debt from the Seller.
The second lein holder may be holding up the transaction because they may be asking for more than the first will or can allow.
The process that normally takes place in a short sale is that the Seller submits a short sale package to the lender or lenders, after they receive the package and it is completed it, they can prove that they qualify for a short sale, it becomes an active file, stage two is the valuation process where the first lein holder orders an appraisal, it must be within the price point of the listing agents price that was listed, then stage three they order the title to make sure that there are no additional leins on the property. Once they are satisfied with all the requirements they either approve or disapprove the short sale, they will give a time frame that it must close. If the short sale package was submitted after an offer was accepted it slows the process, also if there are any documents missing from the Sellers that were in the short sale package. Your realtor should be calling the listing agent a minimum of once a week for updates and if the listing agent is not getting response from the negotiator then the listing agent should be calling the customer care center at Bank of America they can tell them where the file is and if there is anything missing.
While there are a few programs where the short sale on the first mortgage can be pre-approved, I don't know of any where a second or subsequent lien can be pre-approved. Even when a loan is pre-approved (hafa, FHA, co-op) there is a difference between pre-approved and approved. Just like having a mortgage pre-qualification is not the same as having a mortgage approval letter with a clear-to-close.
I'd guess that you're probably having delays on the secondary loans. I would have your agent or attorney contact the other side and verify if the first has issued a written short sale approval yet, a list of any other liens on the property, and what if anything, has been so far on approving the later liens (has a bpo been done, has a negotiator been assigned).
Good luck, and please let us know how it goes, because SSS is a great site since we can help accumulate the knowelege from hundreds of different short sale experiences.
Robert,
this can be a common problem, and forgive me for not having an immediate answer, but rather a few questions that will allow me to answer your question.
1. Do you know if there are any other liens (2nd mortgages, past due HOA dues, mechanics liens, tax liens) on the property or not? If you don't know whether there are or not, you or your agent could look this up on the county recorder's website.
2. Do you know what kind of loan the seller has? (conventional, FHA, VA, etc)
3. It sounds as if the seller may have gone for a HAFA short sale (although it could be a co-op short sale or FHA short sale), did anyone say if that was the case?
I know that there are no other liens agains the house or I'm pretty sure of it. I'm not sure on the loan type but I remember them telling me that the loan that they are going bad on was a loan they took out against the house to help remodel it and they lost there jobs and couldn't keep up the payments. I don't know if it is HAFA or anything else. What I do know is that from what the relator told me is that most of that stuff was already to go with the bank and the short sale. From what I understood they house was on the market for almost like 6 months before it ever got an offer and all of there short sale paper work was basically done. That's what the realtor told me. He made it seem as if it wasn't going to take that long since they were pretty much all ready and since I was paying cash and giving what the bank wanted it should take more than a few months. That is actually why I went ahead and submitted an offer.