You have GOT to be kidding me- what BofA wants from short sale buyers now

So according to my negotiator at Service Link, BofA has a brand new guideline: All short sale buyers must provide proof of funds for Earnest Money & Down Payment at the time we submit the offer. (in Oregon EM is not deposited until we have ss approval).

 

I am beginning to think short sales will soon be a thing of the past..between Fannie Mae's absurdly bloated valuations and BofA roadblocks get me some Xanax.  UGH

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Permalink Reply by Bill Sloss on February 10, 2013 at 7:38am

Please. You can bid on as many houses as you want if youre willing to be bound by the contracts. Thats hardly bad faith on a realtors part.

"remember that foreclosure process is concurrently running with short sale process.  It does not stop when a short sale package being submitted."

Thats correct and why time and communication are of the essence.

" I will not advise my sellers to entertain any serious offers and cooperative buyer's agent without knowing the buyers' capacity to close the deal and especially the reputation of that selling agent."

Its a third party approval and once the contract is signed youre out of the picture. Thats the way it is.

Its between the buyer and the lender. You have no say in that.

I commend you for your willingness to work with the buyers agent. And you are absolutely correct both of you should be working to get the deal done ASAP to avoid the foreclosure. But it doesnt happen that way far too often.

Permalink Reply by Wendy Martin on February 10, 2013 at 9:51am

OMG I didn't think this thread would turn into such a showdown.....I wrote this original post b/c I am tired of getting batted around by BofA, but thank you Mike Rizzo I will take your advice and ask for a letter from the bank confirming ONLY the funds the buyer needs to bring (this is an FHA loan) to close so the lender doesn't get greedy.  Luckily this isn't with Fannie or the greed would just be a given. 

The battles are getting longer and harder and I am exhausted.  After 6 years of doing 90% short sales I fear there is a change comin, and it ain't good. Now more than ever files are being closed for no reason and the person on the other end of the phone (when they answer the phone) is clueless or just plain hostile.

Thanks to all of you here who have helped keep me sane.  Fighting the good fight is really important.  Winning the dirty fight even more so.

Permalink Reply by Bill Sloss on February 10, 2013 at 9:59am

Thanks for posting. I wish you luck. I think you can see there were more against your fight than on your side and thats what allows it to continue.

Permalink Reply by William "Andy" Alford on February 10, 2013 at 10:16am

Hello everyone,

I've represented a short sale seller with Bank of America as the servicing institution.  BoA asked for proof of funds for down payment from buyer.  Instead of sending proof of funds, buyer switched to financing backed by the Virginia Housing and Development Authority that had no money down terms.  We amended financing portion of contract and BoA was satisfied.

Obviously, not many buyers are going to want to switch financing, even if available, just to maintain confidential information.  However, there are other solutions.  Buyer can get a letter from the buyer's bank stating that buyer has sufficient resources to pay the down payment that is required.  

Alternatively, buyer can open account at the short sale bank demanding proof of funds for the exact amount of the down payment and anticipated closing costs.  Buyer doesn't use the account for anything else, and sends the short sale bank a copy of that statement.  Buyer can close the account when deal is done.

Using a bank letter or a dedicated account satisfies the short sale bank without revealing to seller or short sale bank anything more than what is implicit in the contract.

On a concluding side note, reading through this conversation thread reminds me that, in my humble opinion, we could use a little more civility and mutual respect in some of the exchanges.

  

Andy Alford

Realtor, Keller Williams Realty

Fredericksburg, VA

Licensed in Virginia

Permalink Reply by Bill Sloss on February 10, 2013 at 11:50am

Id like to address your civility issue Andy. It appears when people feel defensive about what they do.

My question is Realtors have Articles of Ethics so why not have an Article of Ethics for SS and standards of practice? Insurance companies have standards for settling claims companies have standards for making payments and even credit bureaus have standards for collection.

So why not have a local, regional or national standard of practice for short sales.

There have been some good points made here about cooperation between agents. Lets be serious a SS isnt about profit its about moving the property. Personally I feel for those forced into a SS as it certainly wasnt their dream or plan. They are obviously under tremendous financial pressure. Make the buyer and seller feel they matter.

Why not try and make that easier by making a cooperative statement that agents involveds primary focus is getting the house sold as quickly as possible.

Agents shall cooperate to do that and set that standard starting with detailing timely communication with the buyer and the seller by a specific number of days. Say weekly contact and updates. Make it a standard of practice.

Get a limited third party authorization to the BA. Cut your workload down and allow the BA to communicate with the lender. Saves the sellers agent time and shifts that responsibility.

Insist on timely BPOs and feedback.

Insist on setting the value of the house within x days of the SS contract.

Insist on timely answers to inquiries.

Finally state that you will do everything possible to get the home sold in x days and if not explain to all involved why it cant be done. Make those expectations know to the lenders.

Set your realtors procedures in stone so you all know the standards of practice and the expectations.

When someone doesnt meet those expectations in your deal you have some teeth to use.

Permalink Reply by Charlie Santos on February 11, 2013 at 2:50am

I would have to agree with Bryant & BOFA. The buyers have to have some skin in the game! 

Permalink Reply by Jennifer Beltrame on February 11, 2013 at 3:57am

I've had this request from several lenders and servicers and I've never had an issue with the buyer providing this information.

Permalink Reply by Pat Perrotta on February 11, 2013 at 5:21am

You guys need to get over it!  The original question was about EMD and proof of ability to perform.  That is certainly not unreasonable.  This has morphed into personal insults and blame.  The blame that Realtors have caused this by playing along with the bank's demands.  I've even heard Realtors blamed for having the "bubble burst"!  That's absurd, our job is to put buyer and seller together, anything else is because we care about the deal, not just our own pockets.  Personally, I've reduced my commission to as low as my Broker would allow just to get a deal done! I dare say that just about every Realtor that actually works in this market has done the same.  So let's get over it!  I have had my email jammed with at least 50 answers.  STOP ALREADY

Permalink Reply by Tony Morales on February 11, 2013 at 5:27am

You got a big ..AMEN! from me Pat

Permalink Reply by Mike Rizzo on February 11, 2013 at 5:31am

Blessed by the peacemaker

Permalink Reply by Judi Fiolle on February 11, 2013 at 5:54am

I also have received a bunch of emails from this thread Pat but I have a delete button on mine. I enjoy reading what everyone has to say on this subject. I understand Bill's frustration and I think that we are trying to help with that. I have seen very little insults and blame in this. Most of that has come from Bill's frustration and we are big enough to get it and not be offended by it. Even if he walks away with the same frustrations, I think he will at least understand that there are many who do care and work hard at what we do.

Permalink Reply by Bill Sloss on February 11, 2013 at 6:36am

Weve certainly morphed into a wonderful country when one person thinks theyre so importantr they need to complain to other people having a discussion when its much easier to push two buttons and not say a word to anyone else. I am constantly amazed by the pretentious.

I believe one of the comments said he asks for and submits all a buyers financials.

That is a very unwise thing to do for a variety of reasons relating to a buyers personal financial security.

If my financial security was compromised due to an error in your judgment and you were remotely liable your E&O carrier and I would become very good friends.

Im speaking from the position of a buyer. I can clearly enunciate facts not frustrations but when someone wants to insult me they can reap what they sew.

And if Pat has a problem you can do any one of a number of things but start with changing the United States Constitution to deprive me of my right to free speech.

if you dont want to accept replies and hear other viewpoints post and dont accept comments.

 

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