Bank of America agreed to a foreclosure sale postponement until the short sale was approved. Received the approval and started the closing process.
Title search revealed a Citibank 2nd lien where the debt was discharged in a chapter 7 had not been released. Citibank is now demanding payment from the 1st lien holder to release the lien.
I’ve been trying for the past 10 days to contact the negotiator for Bank of America to find out what to do next.
The approval is only good for another 20 days, and 40 days left on the foreclosure sale postponement.
Help and advise please!
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Neg is likely MIA because it's with a closer now. If this is FHA-backed, I'd escalate direct to them. They now have a "special" dept set up for all of BAC's complaints (as there are MANY). Escalate Citibank too for not discharging this. Possibly contacting the BK attorney would help too?
If this short sale is taking place in California, Bank of America cannot proceed with the foreclosure after the short sale approval has been issued. The bank can, however, proceed when the approval expires.
Always pull a prelim or title commitment when the offer has been accepted to prevent these types of issues of popping up at closing. Citi does not have to release the loan just because it was discharged. It can demand payment to release the loan.
You might want to order a new HUD with the proposed payment to Citi, send it to Citi and ask for a fast approval letter. Also, send it to Bank of America and ask them to revise the approval letter to include payment to the second. The bank could revise the letter or it could make you start over, but then you could ask for another postponement.
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