lake norman real estate

Lake Norman Real Estate: Real Life Experiences with Short-Sales Part 2

 “DECLINED”.  After 6 grueling months of waiting, Bank of America just simply declined my buyers’ shortsale offer.  No counter offer, no explanation.  This is the first distressed sale of any kind that I have not closed and I must admit, I was blind-sided by the news.

While Bank of America is notorious for their reprehensible handling of home loans, especially shortsales, I guess I had to experience it for myself.  The irony is that in an article in the Washington Post last July, 2009,  the writer stated that Bank of America was going to “streamline its short-sale process so that it would only take SEVEN days to obtain shortsale approval.”

Here is my experience:

October 20th, 2009:  Submitted offer to listing agent.

October 20th:  Seller Accepted offer

March 30, 2010:  Offer was declined

Below are emails from the listing agent which provides you detailed insight into this failed transaction:

November 2nd:  “Just spoke to Bank of America regarding the short sale at 153 Pecan Hills.  They confirmed receipt of the entire short sale package (no missing documentation) and informed me that a negotiator would be assigned to the account within 15 to 30 days.  I will keep you posted.”

November 13th:  “Just spoke with Bank of America.  We’re still waiting on a short sale negotiator to be assigned on the bank’s end.  The person I spoke with said they would try to escalate the request, and suggested that I call back next Friday.  He said he thought a negotiator would be assigned by that time.”

November 20th:  “The bank has assigned a short sale negotiator, and the offer, seller’s financial information, etc. is being reviewed.  The next concrete step that the bank will take will be to order an appraisal on the property.  I will let you know when this happens.  (It may take several more weeks.  Unfortunately, the short sale approval process is usually slower than we’d all like for it to be.)  I do think we have a good shot at getting a short sale approved, although I’m not sure at this point what the bank will accept for a sale price”.

November 21st: “Good news — bank has already ordered BPO. Wanted to let you know, in case your buyers want to order inspections. (Or maybe they want to wait for bank’s response to offer first.)”  Note, a BPO is a Brokers Price Opinion which is part of every shortsale process.

December 9th: “Nothing concrete to report. Was told that seller’s lender will contact us on or before 12/21.”

December 22nd:  “Wanted to let you know that I spoke with the agent who did the BPO again this morning, and she confirmed that she submitted the paperwork to Old Republic (the third party) shortly after 11/21.  The file is no longer accessible by her in Old Republic’s system, meaning that they definitely received it.  I just called BofA again and informed them of all this.  They confirmed that the account had been “escalated” told me it may take 5 to 10 days to get a negotiator assigned and for them to follow up with Old Republic.”December 29th:  “I contacted Bank of America again today to get a status on the short sale.  The person I spoke with informed me that they have still not received the BPO that was done on 11/21/09.  She said that she would contact Fannie Mae (the loan investor) to 1) ask them to follow up on the missing BPO (Fannie Mae ordered it initially) and 2) request that a second BPO be performed.”

Copy of email our listing agent sent to Old Republic: 

“I am representing the sellers of XXXXXXX Drive, Mooresville, NC 28078 in the short sale of their property, which is financed with Bank of America (Fannie Mae loan — loan number XXXXXXX).A BPO on the property was conducted on Saturday, November 21, 2009 by XXXXXXX. The BPO was ordered by Old Republic.  According to Ms. XXXX, she submitted the BPO to Old Republic online on or about November 22, 2009, and can no longer access the file electronically.  She has no hard copy record of the BPO, and cannot tell me who (at Old Republic) ordered it.It has been over 30 days, and Bank of America has still not received the BPO.  No short sale negotiator at BofA can be assigned to the file until the BPO is received.  Can you help me track down this missing BPO, and ensure that it is promptly forwarded to Bank of America?”

January 11, 2010: “Bank of America finally received the BPO on 1/4.  Despite multiple requests to “escalate” the file, we are still waiting on the assignment of the short sale negotiator.  Since some negotiators require an appraisal in addition to the BPO, I have requested that the bank go ahead and order this, so we can hopefully shave a little time off the entire approval timeline.  They said we could anticipate an appraiser making an appointment within the next 5 days.  I suggested that the homeowners submit an online complaint form against BofA, via the NC Commissioner of Banks website, which they did last Friday.  Sometimes doing this will give the lender added incentive to move things along.  If we still have no approval of the sale by 6 days before the foreclosure sale date (which is 2/4), we can request that BofA contact the Substitute Trustee (bank’s attorney) to postpone the sale.  Hopefully we will not have to do this, but we do have this avenue if it becomes necessary.”

January 15th:We found out on Wednesday that the bank’s negotiator has finally been assigned!!!”  

February 3rd: Email from me to my buyers with an update:  

I just got off of the telephone with the listing agent.  Fannie Mae has asked for only one change in the closing statement.  They have refused to pay the Home Owners Association dues of $160 that are delinquent so we had to move this fee to your side.  Are you willing to pay the $160?  If not, I will pay them for you.

While she didn’t say that we will have approval, based upon this discussion it looks very good to me!  Right now the foreclosure date has been moved to March 18th so if we get approval in the next few days you should have plenty of time to do your inspections, get your loan and close by the 18th of March.

February 10th:  “learned this morning that a new short sale negotiator at Bank of America has been assigned to the account.  Have left him a voicemail and sent him an email asking for a status.  Hopefully he’ll be a little (actually, a lot!) more responsive than the last negotiator was.  I’ve been trying for days to reach the old guy (by both phone and email), with no success.

I’m on top of it, and will let you know as soon as I have any new information.  I wish I could make these banks churn a little (actually, a lot!) faster than they do.  I have pulled out all the stops on this one, including filing a complaint with the NC Commissioner of Banks, and appealing to the (old) negotiator’s supervisor, and supervisor’s supervisor. “ 

February 19thThe following email (marked with High Importance) was mailed to the new short sale negotiator on Wednesday.  To date, I have received no response from him…

Hi Jerry,

When I try to reach you by phone, I repeatedly get a message (on different days) that your voicemail is full, and that I am being transferred to an attendant.  Instead of being transferred, I end up getting the message that your voicemail is full again, and then the whole process repeats itself.  I have also tried calling Mr. Albert White and Mr. Coty Baselli, but have been repeatedly unable to reach them by phone.

This email is regarding loan XXXX.

1) Short sale package was faxed to Bank of America on 10/29/2009.

2) BPO was ordered and conducted on property in November, 2009.  Somehow, this BPO slipped through the cracks, which caused a 2-month delay (approximately) in the assignment of the original short sale negotiator, XXX on 1/13/2010.

3) XXXXX requested a revised HUD (with increased purchase price of $215K) and updated bank/unemployment benefits statements.  This information was supplied to him by email on 2/3.

4) You were assigned to the loan on 2/10, and requested (on 2/11) that I fax the information that had been supplied to Marcus by email on 2/3 to B of A.  This was done immediately on 2/11.

Buyers and sellers of XXXX property have currently been waiting over 3 1/2 months for a short sale approval decision.  I would like to be able to give them some very specific information on where the process stands, what (detailed) steps in the process remain to be completed, and the likely timeframe for a definitive response from Bank of America on the short sale offer that is on the table — TODAY.  

These buyers and their agent (and sellers, for that matter) are getting very antsy.  I would hate to see this deal fall apart at the very last minute.  If there is ANYTHING you can do to expedite the approval decision process, all parties involved would be very grateful.

February 25th

“Still no word from the negotiator.  I have tried repeatedly to reach him by both phone and email.  I called B of A yesterday, and was told that the bank’s policy was that if the short sale negotiator hadn’t updated the notes on the loan for 10 days, that they (the Short Sale Support Department) could submit an escalation request on the account.  The person I spoke with yesterday said that the escalation request could not be submitted internally until today, and instructed me to call back if we did not hear from the negotiator by EOB yesterday.  I called again this morning, and was told that the bank’s policy had just been changed — that they could not submit an escalation request until a supervisor had not updated the notes on the loan for 20 days.  (Last note was added 2/11.)  I just about lost it…  I explained that I had called yesterday and what I had been told, then I reiterated all that to the “floor supervisor” in the Short Sale Support Department, all to no avail.  According to my calculations, the bank’s 20-day deadline is 3/3. Here is the final email the listing agent sent to B of A:

March 4th: 

You won’t believe this, but I was actually able to reach the short sale negotiator by phone at 7:30 am this morning.  Nice guy.  We had a good conversation, and he explained that Bank of America is MONTHS behind on processing short sales.  He said that the bank’s short sale negotiators had just recently finished up many files that were initiated in July, 2009.  He said that he anticipated working on those that were initiated through October, 2009 (which includes 153 Pecan Hills) this month.  We basically have to wait our turn in line, but at least now we have the short sale negotiator’s ear.  He said the BPO that was ordered last November is now too old to use.  He had ordered another BPO in February that was cancelled internally (for some unknown reason).  While I talked to him this morning, he submitted another BPO request, and told me to follow up with an email to him next week to make sure that the bank had ordered it (from a third party).  He told me that if I sent him an email with EARLY MORNING CONTACT NC in the subject line, he would remember our conversation (since no one ever calls him at 7:30), and it would get his attention.  Hopefully this will be a way for me to be able to keep the line of communication open going forward. 

I also talked with him about the date of the upcoming foreclosure sale.  He checked the bank’s system, and said that the foreclosure sale date had been removed.  So, long story short, our next step in the process is for the bank to reorder an receive a new BPO. 

March 18th:  Foreclosure sale date has been move to 4/15.  we are still waiting for BPO agent to make an appointment to see the property.

March 30th:  Our offer was declined with NO explanation!  Here is the letter the listing agent wrote to the person at B of A:

Hi Jerry,
I just called Short Sale Support to get a status on loan #xxxxx .  I was under the impression that we were waiting for a new BPO, since the original one (conducted 11/09) was too old, but was informed today that a decision on the offer ($215K) had been received and had been declined (not sure if by investor or insurer).
I have several questions for you:
1) How was a decision able to be made using a BPO that was greater than 90 days old?  Is it possible to reopen this file for the purpose of receiving an updated BPO, so that the decision process does not have to start over from the beginning?  Since the original BPO was conducted back in November, foreclosure proceedings have been initiated against the developer of the subdivision, who has filed for bankruptcy.  The future direction of the neighborhood is very uncertain, which negatively affects the values of properties there.  I am concerned that the BPO that was conducted in 11/09 may be overstated.
2) Is Fannie Mae willing to share their bottom line for this property?  Buyers may be willing to increase their offer.  We’d like to know the amount that Fannie needs to receive in order to approve the short sale.
3) Can you share with us the amount of the BPO for the property?

So, there you have it.  My buyers elected not to start the process over again and a backup offer is now working with B of A.  Clearly, the systems at B of A were broken.  The negotiator did tell the listing agent that B of A adopted a new system for handling shortsales during our 6-month ordeal and I understand from the listing agent that the process is going much faster this time around.

I guess what is baffling to me is why B of A, like every other bank I have worked with on a shortsale, didn’t tell us what their bottom line was so that my buyers could decide if they wanted to up their price to satisfy the bank.  This is the first time I have experienced a “declined” rather than what amounts to a counter offer.  I can accept the crazy failure of the process but not the end result.

I hope you find this helpful.  I know there is a lot to read and the fonts changed due to cutting and pasting but I felt I needed to include all of these in order to truly explain this transaction!

RELATED ARTICLES

Lake Norman Real Estate: Real Life Experiences with Short-Sales Part 1

 A Real Life Glimpse into Actual Lake Norman Foreclosure Transactiions 

How YOU can search distressed Lake Norman homes for sale

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