Over the past several months, I heard first-hand accounts from outraged agents saying their short sales, some of which were BOA, were blown out of the water by MI Companies just as the short sale process was coming to a successful conclusion. Really didn't understand how that could happen. Didn't know how quickly I would.
WHAT'S GOING ON HERE? How prevalent is this? What, if anything, can be done about it? Is it only BOA or are other lenders' loans having the same issue? Someone needs to investigate this.
After months of agents marketing short sale properties; bringing in full-market value offers that will net the banks more than foreclosures; have ready-willing-and able buyers still standing there waiting; have sellers coming to grips with losing their homes; bank negotiators have approved an offer; and
THEN THE MI COMPANY STEPS IN AND SAYS "WE GET OUR MONEY OR ELSE." Seriously. They won't let the short sale happen.
They'll force a FORECLOSURE. FOR WHAT PURPOSE?
Are the MI Companies acting alone or are they playing good cop/bad cop with the lenders?
GOT TO ASK, BECAUSE THIS TWISTED TURN OF EVENTS
is putting stressed out homeowners right over the edge and
THEIR VOICES are NOT BEING HEARD. How could lenders benefit from the MI Company stranglehold? Well, a wrench has been thrown into the process and this is dire news for the homeowner! "WE" all need to pitch in now to make this happen, right? All of a sudden it seems perfectly legitimate & reasonable to take more money from the agents, someone's got to pay and hey agents get paid to do nothing, right? And, those lawyers and negotiators who've spent time negotiating with the banks. Ditto for them. And, if we are telling them to pitch in, isn't it also reasonable to expect the homeowners to cough up a lung, too? Wow, that's a nice, tidy sum of money the lender and MI company can now negotiate how to divide up. And, now they've got the money they couldn't get any other way. All in the name of getting it done for the benefit of the homeowner.
Folks, this is how it feels to be on the receiving end of this wrench, and it shouldn't be allowed to happen in the first place.
Stop MI Companies NOW. Their behavior is Petty, Punitive & Bullying. It's throwing the blame for lenders' & MI Companies' own risky decisions onto the backs of underwater homeowners. Who, if anyone's taken the time to notice, seem to be MOST OF US regardless of what kind of loan we have or when we bought. Why? Because those same banks and MI companies have yet to be held accountable for their actions. AND, NOW THEY ARE GETTING AWAY WITH THIS.
Some of these homeowners now caught in this twisted game have refused to play along with the charade of a loan modification. Some have gone through it only to be rejected. Could that be the reason?
Are those MI companies letting them know who's BOSS? Really, someone explain this to me.
Agents who have managed their sellers' and buyers' expectations and kept everyone from going insane, are being thrown under the bus. The homeowners are being held over the fire to pay up or foreclose. They've gone through this excruciating process to be forced to FORECLOSE? ARE YOU KIDDING ME? THIS IS HOW IT ENDS?
It's outrageous & it's offensive! IT'S PUNITIVE!
Someone, please make the madness STOP!
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Gordon, thanks for sharing your experience with MI companies.
In one of these blown up short sales, the MI company, the lender (who holds both trusts) and the investors are all responsible. We knew there was MI, didn't know that, unlike other short sales, the MI company, the lender and the investors would stop all negotiations with each other. The worst part? They can't come to an agreement over a few thousand dollars. Not kidding. They actually "found" the money by reducing our agent fees, was using it to pay off the second investor, and the MI company said NO, all money goes towards the first. That is where all discussions ended and a denial letter was sent. These important decisions are in the hands of people who can't negotiate their way out of a paper bag? Incredible.
I've been prevented from closing on many listings+sales from this very Mortgage Insurance "hatchet job" tactic that decapitates sellers, buyers, and agents. In your case, it sounds like you were not aware of the MI. At the very beginning, I always ask the lender if there is MI. Some lie? Well, I'm not surprised.
Thousands of hours worked and not paid. Typical real estate sales career doldrums since 2008.
As to the why/how, I can only point to legal people and/or conspiracy theories, which just cannot be proven.