Are Short Sales Changing ???
We process lots of short sales here in Central Ohio. Recently in about the past 4 months we have seen the landscape of short sales changing quite a bit. These things have happened in the past but not in such high frequency. It seems the banks and investors are becoming anti short sale. Please let me know if any of you short sale experts out there are experiencing these same issues.
FHA Short Sales - Buyer is denied immediately because house was vacated. No variance sent to FHA. Bank is offering seller $3,000 to do a deed-in-lieu instead.
FHA Short Sale BoA - After ATP was issued the bank refuses to review file. We escalated through FHA and FHA couldn't get the bank to respond to the offer either. We escalated through BoA and that didn't help. ATP finally expired. Lost buyer after 4 months.
BoA Co-op - Had an approved co-op with BoA. Had an acceptable offer. BoA would not send to Fannie Mae for final approval. They passed the file from escalation manager to escalation manager 4 times until the property foreclosed. We escalated through HomePath and BoA. No results. The last escalation manager named Maria Rubio thought Fannie Mae was spelled " Fanny May" This file sat for 6 months.
High BPO Values - Several listings are sitting with no offers because of high BPO's. We have disputed all of these but can not get a fair market price from the investor. We spoke to people who did the BPO's and their values were not as high as the investors.
3rd Party Authorizations Lost - This is happening on several files. We send the 3rd Party form and talk to the bank. The next week the 3rd Party is gone. We resend it gets lost again. It seems they are losing them intentionally.
Other Paperwork Lost - We send a full package and then we verify that everything is received. Then suddenly what we verify is there turns up missing. This is happening on several files.
In general it seems the banks are making it more difficult and intentionally trying to mess up or delay the short sale so the property can go to foreclosure. Am I the only one feeling this way? Please share your thoughts?
Replies to This Discussion
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Permalink Reply by Smitty on
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BOA FHA is a joke IMO - so across the board on this one, I have yet to see BOA/FHA ever be smooth. Wells, Chase, US Bank etc., all do a better job at FHA sales than BOA.
Lenders ARE making it more difficult. Where we could get one buyer through at one time, I'm seeing counters on property that is completely unrealistic, the buyer walks, and we relist and then waste another 4 months progressively dropping the price to where the first offer was originally OR even lower and then the bank has to reappraise and then the second or third buyer's offer get accepted. Everyone loses out because the bank is usually out 4 or more months worth of payments than if they had taken the first offer, the seller is stressed beyond belief, the buyer's aren't happy...Lately escalating is a joke. I escalated a file two weeks ago and was told I'd have an answer to my issue in 72 hours. I've had to escalate 3 times and I still don't have an answer and when I get a call I keep being told, "Oh, I see we've contacted you about this issue, so you're all set?" NOOOOOOOOOOOOOOO, each person can't help and just says they were told to contact me.
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Permalink Reply by Donna McClelland on
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OMG you are so right about BofA FHA short sales. I have two short sales where the idiots they hire to process these short sales denied the sellers based on the amount of the seller's income and expenses. In both cases, the expenses were higher than the income, yet on both short sales, the processors claim that the income is higher than the expenses! The correct figures were right there on the financial form, yet they come up with completely different figures! I think they are just doing this to jack people around because they don't want to do short sales anymore on FHA loans. I will not take any more FHA short sales.
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Permalink Reply by Scott Marvin on
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I have 3 sellers this week that were contacted by their lender to do a Deed-in-Lieu instead of a Short Sale. 3 different banks and one of them offered the seller $3,000 to do the deed-in-lieu.
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The deed-in-lieu I have seen does not waive the deficiency. The bank may try to collect in the future. Not a better option than a short sale in my opinion. With most short sales the bank waives the deficiency. Credit score is another factor.
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Permalink Reply by Kevin - Greenville, SC on
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Who is placing this stress on the Seller?
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Sadly what you describe has been business as usual for many years....
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I am considering closing my short sale business. I ran a 95% closing rate for 3 years and have closed over 150 short sales. Now I am at about 65%. With Fannie Mae and their high values and the banks recent desire to not approve the short sale and the changes with FHA I don't see how I can continue to do this kind of work. Our average price range here in OH is about $150,000 so it just isn't worth my time to do this anymore. I love helping people but I need to eat too and a day off once in awhile would be nice.
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Permalink Reply by Jeff Payne on
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Scott Marvin, I am doing the same. We are targeting equity sellers with a radio show. Plan is $3,000,000 in listings taken each month and so far we are on track and NONE have been short sales. Writing is on the wall
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For a lot of you that have done a lot of short sales and have customers that lost their homes more than 12 mos. ago you might be able to put them in a new home . Some may know this already but FHA as of the 15 Aug. will finance a loan under certain a new guide lines . I have the new guide lines and they are not to hard to meet. Could create a lot of new deals!
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Since banks don't "LEND" money, they don't lose any in a short sale or a foreclosure. It's all a profit center for them. If they're just servicing, they want it to go on forever. If they take a property in a foreclosure, the tax payers will foot the bill, they will then sell and make money on money they never lent.
Fractional banking and the open window at the FED, which funds most deals, gives the banks profits in any market or house "lending" situation.
Remember the year they got bailed out, check and see how many in millions and millions was given out as bonuses. They know they're untouchable by anybody.
Sad.
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This doesn't bother me any. In fact, I'm wondering which late night programming would mention this material, Ron?
Ron, you sound like you're familiar with Fractional lending and the Fed's role in lending. Good, need more good banking folks like yourself.
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It's ironic that the sellers, buyers, agents, title companies etc. need to sign strict addendum's for any sneaky practices and notarize our honesty to the banks, of all entities.
That's like citizens swearing to tell the truth to congress, of all people. Lol. The world is upside down.
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