There has been alot of talk about arm's length transactions lately and the banks "new" addenda needed. There has also been talk of flippers, floppers, scammers, investors etc.
If we want to know why the banks think everyone is trying to scam them, read this article and the thousands of others like it.
Like it or not, this is what we have to deal with.
Scammers always seem to make a buck in tough times
Here are a few paragraphs.
'One of the more glaring results of the CoreLogic study was that short sales resold on the same day had an average of a 34 percent gain ($56,947) between the sale prices.'
According to the study, “suspicious” transactions are short sales that might have caused the lender to incur unnecessary losses. “Suspicious” short sales are defined as:
• a new transaction less than one month after the short sale where the new sale price is at least 10 percent higher than the short-sale price;
• a new transaction less than three months after the short-sale where the new sale price is at least 20 percent higher than the short-sale price; or
• a new transaction less than six months after the short sale where the new sale price is at least 40 percent higher than the short-sale price.
The study examined more than 450,000 single-family residence short-sale transactions in the past three years. It noted that some legitimate property rehabilitation and “flips” — where repairs and improvements were made — have occurred within the “suspicious” time frame.
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But then that would make too much sense and the banks wouldnt be victims :)
The banks are making too much money servicing these loans and ulitmately they dont care if the investor loses money
Sue Ellen,
Don't know if this will help...but a friend of mine called in to Customer Service...and asked them to track down a certain individual for them and they were successful...I don't know if you have tried Customer Service already, but I would just explain to them that you have a bad phone number and email and see if they will help.
Jeff Payne said:
SueEllen, Did you get your deal closed? Do share.
SueEllen Morse said:We have no contact information . Equator has only Bruce Morales and no number or email is correct. I've called BOA and they still give me the same number doesn't work. So title company is trying but we have no current contact info to get the Final HUD..
But then that would make too much sense and the banks wouldnt be victims :)
The banks are making too much money servicing these loans and ulitmately they dont care if the investor loses money
I just returned from a loss mit conference and this was one of the high topics of discussion. Many vendors were showcasing software to circumvent the real estate agent and have offers presented directly to the asset manager, investor, hedge fund manager, etc. The assumption was that since they don't know who to trust, they will trust no one.
Look on your seller's mortgage statement and get the 1-800 # on there. That will get you to you of the few polite people at BOA.....customer service! I use the line, "Hi, I'm a POed Realtor®! I apoligise up front should I say anything out of line, as I realize YOU had nothing to do with my situation." Then pause and let her/him comment! After a little small-talk and her feeling a little sorry for you........then you ask......Can you look up the extension # or email address of Betty/Tom Jones(or whomever you are working with). Usually they will give it to you.....then you ask for her supervisor's name, phone &/or email just in case John is "out sick or on vacation". After receiving that, ask for the next level supervisor......just in case!
If that doesn't work, then call the OCC (Office of the Currency). 1-800-613-6743 Have a pen & paper ready as they will give you a web address to file a complaint online (I can't remember it as it is in the file at the office). After filing a complaint, the bank has to respond within 10 days.
I was getting the runaround with Chase. No notes had been added to my file is almost a month with no return phone calls. (Chase negotiater says they can't send outgoing emails) SURPRISE........I filed the complaint last weekend. On Thursday, they answered the phone and made a counter offer, and then called ME on Friday! First call from them in almost 4 months!
Good luck!!
What I resent the most is that the banks want agents to put THEIR financial interest ahead of our own clients. Because of the banks own inept approach to short sales they have been scammed, and as a result they come up with overreaching policies that interfere with agency. Is there fraud out there? Absolutely. I personally have a problem with anyone who is re-selling a short sale the same day with a 34% increase. That, I think is pretty problematic. Of course, I have absolutely no idea how stupid the bank on the other end of it is. And of course, problematic can be overcome with full disclosure and this survey has no way to address disclosure. Many times things are fully disclosed to banks and they still ignore it and then when they get around to reviewing a file after the fact they want to cry "fraud." Ridiculous.
Every person on the planet does not exist to protect Bank of America (or whatever bank it is), we don't all live and die to make sure BofA is ok. You mean to tell me you're unknowingly selling short sale properties 34% under their true market value? Wow, you sound pretty stupid and inefficient. And this should be my problem on my legitimate short sale file? I don't think so. I will give BofA in particular some credit as they are now ordering full appraisals on their files instead of relying on $10 BPOs from struggling agents to value assets worth hundreds of thousands of dollars. And, short sale sellers need to make sure to protect themselves from these claims of short sale fraud. They need to make sure the disclosures are made in writing.
What this survey ignores is that there is a legitimate need for investors on short sales due to bank processing inefficiency and also because of how banks choose to sell short sale properties (many will not allow any repairs to be subtracted from their net under any circumstance). If a bank won't allow $2500 worth of repairs to be deducted from a net to accomodate a VA buyer and all the fair market buyers are VA -- well they are going to end up with an investor involved and that investor isn't going to pay tip top dollar -- they are going to attempt to get that property for as cheap as possible because they want to make a.... PROFIT <gasp>. That is what business is all about -- the problem is that these lenders think THEY are the only one that should be making any money and everyone else should be "begging for lodgings."
At the end of the day when all the procedures are followed who cares about the motivation of the buyer? If he bought it as an investment, did his homework determined the ownership would be profitable, he is still the party taking the risk, putting money into the purchase.
Now if there is fraud involved in the purchase, its not a scam, its fraud. We've all seen purchases where there has been a good property where no one made an offer until it was a flat bargain, it needed a few repairs, where banks won't fix it. I guess the "penny wise" bank didn't understands the dollars that could be made with fixing the heating air system or the roof on a short sale....
As a short sale flipper, I am proud to say that I have made short sales happen when a traditional short sale would have sent the homeowner to auction, guaranteed. We can do things that nobody else can't... for example:
1. I paid 5k at closing that the lender wanted from the homeowner. My profit went from 8k down to 3k .. NO PROBLEM!
2. I increased my offer 50k in order to get full satisfaction for the homeowner. MY profit went from 60k to 10k .. NO PROBLEM!
3. A homeowner had an auction set inside of 45 days and they were NOT going to postpone. My investor offer went in immediately, got the title cleared, the letter of approval and offered a fast closing to a buyer who lived next door. I did not make a dime on this one because we had no time. NO PROBLEM! A traditional short sale would have never closed in time, because how long would you have to wait for a buyer?
4.THE LIST GOES ON!!!
The point is simple. Would a retail buyer increase their offer 50k? Would they pay 5k at closing for the homeowner? Would you the agent pay 5k at closing (60k sale?) The answers are simple .. NO! But, because an ethical investor like me was in charge and doing things the RIGHT WAY, deals are made possible where they would die without me.
Whats the average short sale closing percentage now? Last year, nationally, less than 25% closed because of problems in my examples... maybe YOU should work with an ethical short sale investor like me! (In Florida!)
P.S. My agents make 6-9% commission and do not touch the dirty negotiating work when they would only make 3% without me AND do all the negotiation work! It's a win-win-win-win-win-win-win-win-win
win-win-win-win-win-win-win-win-winwin-win-win-win-win-win-win-win-winwin-win-win-win-win-win-win-win-winwin-win-win-win-win-win-win-win-winwin-win-win-win-win-win-win-win-winwin-win-win-win-win-win-win-win-winwin-win-win-win-win-win-win-win-win
:-D
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