Bank of America - approved short sale but now they are changing servicers (loan sold)

Just received this from BOA: Please be aware, the lien on this property is scheduled for sale to a new Investor (non Bank of America) on 1/31/2013. This Sale will need to be closed by 1/29/2013 as we need to review and approve the Closing Docs, and require enough time to stop the Service Release. If this Sale does not close by 1/29/2013 you will need to obtain a new Sale Approval from the new Lien Holder.
We do have short sale approval but there is no way we will be able to close by that date.  Spoke to the closing officer and his manager but no luck in getting this cancelled.  I have already reached out in Twitter but they could not provide any assistance regarding this.  Reached out to the negotiator also but no response as of yet.  Any thoughts on who else can I escalate this file to?

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You better tell your buyers Right NOW that they have no choice but to close on this deadline date. Better call the escrow agent and let her know this as well, and make sure escrow is ready to go. If this was me, I would have an all-cash back-up offer in place, and tell the buyers today that I will be moving to back-up offer if they can’t perform by the deadline date.

Do you have a back-up offer (I hope)? All short sales should have a back-up offer, and best if that is a cash deal. This is FYI, most likely the buyers don’t care if you have to start all-over, in fact if you don’t light the fire under them they will close whenever they feel like it, while your sellers credit continues to worsen with late mortgage payments. The sooner you realize this current offer is dead, and you seek an all-cash buyer, who is willing to close, the better off you are and your sellers. I wouldn’t waist precious time spinning your wheels with BOA.

Just assume you will be serviced released, now you have time to seek a new buyer, and streamline your SS package, so it’s all ready when the new servicer has the borrowers loan in their system. Believe me, you probably will close sooner with the new servicer, and new buyer, by the time the current buyers are ready to close, if you were still with BOA and didn’t have the loan serviced released....

Sorry for your trouble. I've been through what you're going through now. If you don't get it closed hopefully you will with the next servicer, I did.

Hi Howard,

All the responses are great. I just had a similar one. Make sure you send the addendum to extend. Call the new Services to see if you will need a new approval and how long. Also call BOA the day after the Service release date to see if was actually released. Sometimes it is not done.

Ugh....I had a BOA approval that was sold to OCWEN a few months back and had to begin the process over again...Sorry about that....

is it fannie mae backed? try them.

Get in touch with the new servicer escalate through them.

A second lien holder will not foreclose unless the foreclosure sale will bring in enough funds to pay the first entirely and leave them enough to pay the fees of the foreclosure process plus profit.

Just let it go to new servicing company... likely greentree, everhome or one of many others.  Update your financials from client have it all ready and submit same day as contact is made.  These other companies are like charged off ones where they have the bottom line # for you.  If you have everything up to date and properly executed approval could be a week or two away.

BofA customer service will release the name of new servicing company.  If no luck try the seller's mail...

The key is have it ALL ready. 

Howard, 

We are currently dealing with the same situation and the best of luck to both of us. Look's like BofA is switching them over to Specialized Loan Servicing and we are chasing for information with the borrower on documentation provided per the servicing agreement.  Is the second: a purchase money or HELOC (pulled out to improve the home)?  It' important to keep that in mind in order to make sure your client wont be liable for a deficiency..  If it's a purchase money loan- it's considered a non-recourse loan but if it was equity money pulled out (the majority of these loans are recourse loans) 

I was told they aren't supposed to do a service release on a short sale that is approved, and if it happens by accident, you can escalate to keep it in-house. All of mine that were yanked were not yet approved.

Elizabeth  that is not correct many loans are service released after approval and the new servicer honors the terms of the previous servicer

I've had to deal with this twice in the past couple months as most short sale agents have. I fought them both and kept them with BOA. In all honesty the first one I gave up on as after I threw a fit I was told there was nothing I could do but they would keep trying. I was headed on vacation in Europe so just figured that I would deal with it when I got back in a week and a half. I got back and called and they said, "we didn't end up releasing it."

The second one I was much more hands on knowing that they can keep them. I had the best closing team dealing with it and escalated to the very top. The manager basically told me that it was out of his hands but everyday he can upload a request for it to be excluded from the service release with a valid reason. I called everyday to see what happened and he kept getting "no's" but about 3 days before it was released he got a notice saying that it was excluded.

Thankfully I got him on my side instead of getting mad as it wasn't his decision and I know he really went to bat for me. I'd encourage you as other agents have said to have the buyer prepare for closing early if possible but never stop fighting the release. The closers at BOA seemed to appreciate our effort to close on time and really got on my side which I think is ultimately what saved this deal!

Great advice...  ultimately, underneath all the policy and procedure is a real person who chooses to do you a favor or not.  Make them you Ally.

I had the same thing happen to me in October.  We were told we would have short sale approval shortly.  Then we were told that the loan was being sold to another investor and it wouldn't be able to happen.  So, wait to find out who the new loan was with.  I did and then had to get the new loan number resubmit everything.  Three weeks out I couldn't get through on the phone system.  They didn't recognize the loan number or seller's social.  Finally found out that the loan was sent back to BOA and to start all over with them.  I did and I got the approval to close last week.  I have told the buyer's agent to get this closed ASAP before the date on the approval letter in case they sell it again.

Sorry, but you have no control over this.

Joan Psarros

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