Short sale DENIED with No Counter
So here goes.long story short. Three years ago now I have stopped making payments after we found fraud and another member of our group file for bankruptcy on a 1M house that was done as an investment/second home property (we were going to use it for a few years and then sell it)..
We have brought a short sale to the table (now PNC was NCB) offer two times which was approved by the first then denied by the second. Now the third time the second approved but the first denied with no counters. We added an additional 30K to the offer and again the first denied with NO COUNTER. We have a lawyer involved and we just threatened the bank, and finally the foreclosure lawyer said that "he wants no part of a legal battle." That was almost 2 weeks ago and still nothing. So now I just got a 4th offer with more money and again we will add an additional 30K. Right now I'm not going to go through the crap of getting all our financials together again and doing this when they won't even come to the table. We have some real discrepencies in our loan that was uncovered through both a loan auditor and a retro appraiser. lots of behind the scenes legal stuff. So far our legal fees are about 15K and we haven't even gone after the bank yet. At this point we don't have another option since this investor won't even come to the table.
HELP PLEASE. We are not some rich folk, it's a long story as to how we got here. But here we are now and I desperately need out of this. We have done everything to show good faith. the house is in mint condition, well cared for, HOA fee's paid, insurance, if it breaks we fix it...
I could go on and on but there it is in a nutshell.
Replies to This Discussion
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Permalink Reply by Joshua Gayman on
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Sharon,
It is great that you are paying the HOA fees and maintaining the property during the process. Now we just need to get the right message to the right person. If you can show the bank that it will foreclose if they don't accept the short sale and lose more money, they will take it every time. I have the contacts, message me.
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Permalink Reply by Sharon Smith on
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Joshua,
I appreciate your offer to help. My house is in Florida, Manatee county. The bank loss mitigation department will not tell us who investor is (do they ever?). We had a title company that does short sales work with us this last time with again no avail even though we had contacts this time. We have a great hardship letter that lays it all out there. The problem I think is this. There are three of us on the note (was supposed to be 4) my husband, my sister, and my mother. My mom is retired and is a cancer patient and sadly is not doing well. I'm a stay at home mom, and my husband is a director at a company does well but not crazy pay. My sister is an executive at a large company and does VERY WELL. So there I think lies the problem. They look to her as this huge wage earner and able to get more out of her, meanwhile the other two on the note are screwed.
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Permalink Reply by Jeff Payne on
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Sharon, there are several ways to find out who the investor is on the note. Did you check Fannie and Freddie's websites? If you are unsure of the investor, it is a good idea to send a QWR, Qualified Written Request, to the servicer in the beginning to find out who the investor is.
I see that medical issues for your mother could be the hardship. Question is, is the group or one of the group capable of making the payment? Keep in mind that if the lender thinks they can do better by foreclosing and attaching a deficiency, they will often do just that.
BTW, "threatening the bank" does very little....
Where is your agent in this?
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Sharon,
In a short sale, the "chain is as stong as its strongest link"...the hardship of your mothers illness, while hardship to her and her ability to pay, does not create a hardship for your sister or husband other then a hardship of financial pain. They are now required to pay more then their share, but that is affordable (at least I am assuming from your post). Your sisters financial strength and your husbands relatively strong financial situation create a lack of hardship as a whole. You have to understand that banks are soul-less, for profit institutions that are looking out for their bottom line...they are doing their job to collect on promossory notes where there is the ability to collect. It sounds as though if they go after your husband and your sister legally, they will be able to collect this debt in full. Why would they accept a discount if they do not have to?
I have seen these type situations several times in the past and the only way around the "strongest link" problem that I am aware, is to not persue loss mitigation efforts (short sale, deed in lieu, etc) because that requires disclosure of financials. I have seen groups simply let go to forclosure, then they work through an attorney to settle any deficiencies post foreclosure, while always refusing to disclose financials without court order. This effectively allows them to "hide their hand" so the banks is unaware of their financial strength...without knowing their chances on collecting, the banks will be more willing to settle for a reasonable amount.
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Sharon,
I am always happy to help :) - The loss mitigation department will never tell you who the investor is. Once they know you are doing a short sale, it is war between you and the short sale department. The customer service department however, will often give you the investor information. I would call into the customer service department with your bank, and tell them that your financial advisor is looking into ways for you to pay off the loan, but that in order to do that they need to know who the investor is. Often, people in this department will gladly give you the info you need. Just don't tell them you are actually trying to do a short sale. If you cannot get the investor information that way, go to google and type in "fannie mae loan lookup" and "freddie mac loan lookup." There you can put in your name, address, and loan number and it will tell you if they own the loan.
You said the title company has great contacts with the bank.. I can tell you from experience that often times the "insider" contacts that people have, are often not worth jack. Hard to say tho if they have the right contacts or not.
As far as having a great hardship letter, they really don't exist. Unfortunately, loss mitigators are ruthless and they won't bat an eye at the fact that there really is a serious hardship here. They only care about making a decision between which they have a better shot at getting more money in, short sale versus foreclosure.
Based on what you are saying about multiple people being on the note, and some of them having good income, I am guessing that the bank is thinking at this time that they can make more money foreclosing and then persuing a deficiency. I am not sure the exact laws in Florida, but I would say to tell the bank either way, that in the State of Florida if they homeowner goes to floreclosure they cannot persue a deficiency, so they need to take the short sale anyways.
The thing is, even if they do have the right to persue the deciency in Florida, they have already approved the deal in the past, which means there is a set of financials that you submitted before that led them to believe accepting the short sale was better. THIS MEANS IT CAN BE DONE AGAIN, SUCCESSFULY :)
Are you working with a Realtor to get this done? And if so, what is their track record on short sales? I am in Scottsdale Arizona but I have a great Agent Referral in Florida I can give you who should be able to get this thing done for you. They have successfully closed hundreds of short sales in the past few years. Let me know if you would like their info and I can message it to you :)
BEST OF LUCK!!!
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Can someone explain to me this line "they only care about making a decision between which they have a better shot at getting more money in, short sale versus foreclosure."
In our case ---what money---if they go to foreclosure then we will file for bankruptcy-- then they would get nothing! Right?!
One other thing to note....Our case went into foreclosure but then they didn't do anything with it for almost 2 years so the judge ruled it closed for now, but they are allowed to re-open. (whatever the lawyer term for that is....) So currently they haven't sent us foreclosure papers yet....but still denying our short sales---.
It's been three years and still in limbo.
Well guys thanks for the input so far--- though Sam it's too late, they already have ALL our financials. We went with what our lawyer told us to do ---at the time was to get a buyer so that we could get the bank to the table. Obviously there is no table. I don't even know what the best path is other than take the bank to court. As I mentioned earlier we did find discrepancies with our loan and other things -so we do have a case. Just not an open and shut one. We are working with a realtor who has done tons of short sales and has told me that unfortunately PNC is just one of the worst.
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Yes Sharon. If the home is under-water, and you can show them why you cannot make payments to them, then they are weighing short sale versus foreclosure and which is a smaller loss to them. If they feel that you *can* make the payments, then they are going to try and get you to pay as long as possible. Sounds like it doesn't make any sense for you guys to keep paying. Like you said, if they go to foreclosure then you will file for Bankrupcy, and they will get nothing!
It doesn't matter that they already have your financials. They banks update these things every 90 days. If you are trying to short sale, you will re-submit a new package. They will still have the old ones, but will they look through the whole file to find them?? Probably not.
As far as taking the bank to court, I don't know any legal advice. What I can tell you is that it will be expensive out of pocket costs to hire an attorney, and from my experience attorneys are not the best route to do a short sale with. They are GREAT for reviewing an approval letter to make sure you are protected in all the terms of the short sale approval, but they don't usually have a clue how to negotiate with the bank for you. This is unless they are doing that full time, as the game changes daily.
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Sounds like you have confidence that they will be eligible for bankruptcy? No income or assets of note holders that will disqualify them for bankruptcy or cause them to loose as much in doing so?
This is another thing that makes bank negotiators realize they are dealing with rookies, the "B" word dropped left and right when it is obviously not an option.
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I respectfully have to disagree with Sam's last comment.
"This is another thing that makes bank negotiators realize they are dealing with rookies, the "B" word dropped left and right when it is obviously not an option."
Bank executives and high level management might know and understand bankruptcy, but the negotiators don't. Most negotiators don't know anything other than the guidelines posted up in their cubicle with a thumb tack.
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And your threats of bankruptcy are I'm sure the first they have heard? It must make them quiver with fear...
Don't you think they have programs that they plug numbers into? Plug in two very healthy incomes from note holders, perhaps some significant assets...you seriously think they are that unsofisticated that they will simply fold from your cookie cutter bluff? Even after they have seen your hand and see that you have no cards?
If I am not mistaken, she has been marching to your strategy, how has that been working out for her?
I apologize for being a jerk, but when you over simplify the reality, in a situation that has such real consequences to the homeowners, as you are soliciting their referral, causes me to feel the need to step in and call it like I see it.
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It's ok, you can be a jerk. I am thick skinned, I talk to negotiators and bank executives all day.
You are mistaken when you say she "has been marching to my strategy."
I know that they have softward that they plug the numbers in, so do I. You are giving the banks way too much credit here. I realize that at a high level a good loss mitigator is going to be able to identify whether the borrower is a good candidate to collect on later or not. But if you are good with short sales then your goal is to get the deal done without bringing in too much attention, only escalating when neccessary and makes sense.
No duh the banks hear "BK" all day. But to just shut it out because of that is nonsense.
You are entitled to your own opinons. No disrespect here.
I am curious as to the number of files that you have closed?
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Sorry for being so harsh, Glad you have thick skin...I guess anyone in this business would have too. I've closed somewhere over 100 short sale deals, not sure exact # as I have not gone back and counted in months...all shapes and sizes from over $3.0 mil to under $50k...even closed one recently with 3 mortgages, a state tax lien, a mechanics lien and 3 judgement liens.
The resounding theme...every one is different, and when you think you've got it figured out, it changes. -
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