(Frustrated in Florida) Lender Appraisal After BOA Approval Letter - Revised Hud 1 - Waiting Game

Hello Everyone!

     I am a buyer of an approved BOA short sale.  Lender (Chase Bank) requested an appraisal on the property and sure enough it came in 37k less than the amount on the approval letter.  My agent forwarded the appraisal to the sellers agent who notified BOA of the appraisal.  My agent then did an addendum to contract (price change request) for the appraisal amount and Sellers agent forwarded the signed addendum and a copy of the appraisal to BOA.  OK ... my question is this - I have a closing date of October 31st with a rate lock for the same date.  How long should I expect to wait to hear back from BOA on the price change request?  The revised HUD 1, addendum and appraisal were uploaded to BOA last week.  If the closing date is pushed back I will be paying extended rate lock fees... my lender tells me it's over a thousand dollars every 15 days. This is the most frustrating experience.  Short Sales are not for anyone on any type of schedule (4 months of invested time).  Don't get me wrong, I know that the price change is a big deal but at the end of the day the property is being sold at Fair Market Value.....   

Any advise or comments given will be greatly appreciated.

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Permalink Reply by Diane Gish on October 15, 2012 at 1:11pm

The bottom line is $37K is a huge dollar change on the hud and is going to have to be reanalyzed by the lender, the investor and the MI company if one is involved.  After waiting all this time the deal COULD fall apart.  You have no choice but to move ahead with your loan process and position yourself to close quickly, in case the deal does get reapproved.  The good thing in my opinion is you are dealing with BofA.  They have gone from one of the worst, to one of the best lenders to work with when negotiating short sales.  There are many ways the listing agent can reach out directly to the negotiator and the asset manager and inquire as to what will be involved for the deal to proceed.  They can at least get you an estimated time line.  Good Luck!

Permalink Reply by E Brown on October 16, 2012 at 3:58am

Thanks Diane.  I will request that the sellers agent get some sort of time line and hope for the best.

Permalink Reply by Johanna Devon on October 16, 2012 at 1:25am

1. BofA has to re-submit the file to the investor for approval.  Could take 10 days.  Ask listing agent to stay on top of the file.

2. If your lender is telling you they are going to charge you for a delay of closing..GET A NEW LENDER.  Rates are down and you need to shop around.  Tell your lender you are cancelling the loan and see how quickly they change their tune.  I will still shop around for a new/better rate.

Permalink Reply by Johanna Devon on October 16, 2012 at 1:27am

AND if you do move the loan.. send a letter to your current lender requesting they TRANSFER the ENTIRE file to your new lender...This includes the appraisal.  With the delay from BofA and getting a new lender..you should be in good shape to stay on track.

Remember your lender is working for you..not the other way around... If you don't get what you want..send them on their way.  

Permalink Reply by E Brown on October 16, 2012 at 4:03am

Thanks Johanna,   I would have never thought of canceling the loan.  But you are absolutely correct.  I have already invested time and money in this process.... Inspection / Application / Rate Lock fees etc.  I will definitely call Chase and tell them how I feel.   The one thing that I have learned from this short sale process is that the only person/s that really benefit from a short sale is the seller who is getting rid of a bad loan. 

Permalink Reply by E Brown on October 16, 2012 at 6:33am

Johanna - just got off the phone with my lender and to my amazement there are no fees if I cancel the loan.... You were right on with this one.  They changed their tune immediately.  Told me not to panic that something could be worked out... lol.   Thanks again for your insight... 

Permalink Reply by Brent Innocenzi on October 16, 2012 at 4:35am

If the Investor is Fannie Mae it will definitely take longer than 10 days and most likely they will not lower their value/price. I have several BofA files in FL where Fannie Mae has advised that an appraisal is only a matter of opinion and they stuck to there inflated value. Most BofA short sales in FL are Fannie, but hopefully yours is not. Good Luck!

Permalink Reply by Meg on October 16, 2012 at 5:58am

The same thing happened to me, except I was dealing with Ocwen. The original approval was in early August, but the appraisal in the middle of August threw the whole thing for a loop. I didn't end up getting the new approval until 10/5. In my case, one thing that I think held it up was the fact that the original approval included sellers' concessions. No one thought to drop them due to the huge drop in price ($20K), and the file got held up in underwriting. Also, the sellers weren't "late enough" on their mortgage, so we had to wait for that to happen too. The good news, of course, is that I am getting the house for a lot less. Closing is scheduled for Friday. 

Good luck to you!

Permalink Reply by E Brown on October 16, 2012 at 6:31am

Thanks Meg,

    No sellers concessions here.  I don't know if it is a Fannie Mae loan.  I will have to TRY and be patient.  I am happy to get the property at a much lower price but I am not enjoying the pain it is taking to get the deal done.  Good luck with your closing and enjoy your new (discounted) home  :-) 

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