Imagine this screaming guy as a buyer, a seller, a Realtor...maybe it's YOU! I know we're in a bad economy and real estate is still operating at a level of about 10 below Rock, but seriously, does the short sale process have to be so heinous?
Picture this...a married couple gets a loan approval about three years ago based upon their ability to work overtime. The bank assures them that they can re-fi their property in two years and bring their mortgage payment down. Then the economy goes haywire, and their overtime is stopped. All this happens the year before they were to re-fi their property. Now they can't afford their mortgage payments, and they go through a year and a half of pleading and trying to negotiate with the bank (B of A - no surprise there!) to modify their mortgage. B of A, in its INFINITE wisdom, tells them they can modify their mortgage, and proceeds to tack on penalties, interest, and the kitchen sink to the back of their loan, which causes the monthly mortgage payments to go UP another two hundred dollars!
What's wrong with this picture? A two hundred dollar a month INCREASE when they couldn't afford to make their original payments? Wow - AMAZING! So the couple reluctantly decide to short sell their home. They're approximately two hundred thousand dollars upside down on the mortgage, and there's no way the home's value will increase any time soon.
In steps their Realtor (me). I put the property up for sale, and get a GREAT offer, which I submit to the bank on Nov. 19, 2010. I have the buyers and sellers get ALL the necessary paperwork to me in order to expedite the short sale process. I upload everything on Equator.com and proceed to wait. Twice each week I send a message to anyone who can read at B of A, requesting an update. November slips away. December isn't looking good, until I finally get a message on Dec. 27, 2010, telling me that the short sale process has "started." Great. Started? Over a month later, it has "started?"
So now we're into the New Year. Nothing is happening. I'm writing three times a week now, and am finally starting to "shout" in my messages. Finally, on January 18th (TWO MONTHS after I submitted the package), I get a notice telling me that the short sale is awaiting analysis. I'm less than thrilled with this information; what the heck is going on?
On January 26th, I get a notice that the negotiator is countering the offer- they, of course, want to cut my commission, and THEN they're demanding that escrow must close on or before February 9th, the day the property is scheduled to go into foreclosure. Holy Cow! WHAT???? So I go through the motions of the counter offer, sending it back, along with an updated HUD-1, showing, at the negotiator's insistence, a closing date of February 9th, even though I tell the negotiator that there's NO WAY this is going to happen.
Next comes a flurry of requests for, guess what? ALL the paperwork that I've ALREADY SUBMITTED to them. That's right! ALL the paperwork, ALL OVER AGAIN! AND, it has to be delivered to the negotiator within 24 hours. So I stand on my left eyebrow and whistle Dixie and get everything uploaded within the 24 hours (the sellers did have to send updated bank statements and paystubs). NOW the negotiator tells me that there's a second lienholder on the property, which I KNOW is NOT TRUE! I spend several hours arguing about it until my point finally gets accepted. Whew! Another day lost!
Now it's February 1st - only only 8 days away from the foreclosure date. The negotiator sends me a message telling me that the sellers' hardship letter is "vague," and that the investor won't like it. I spend a couple of hours with the sellers, beefing up their hardship letter, trying to include EVERY detail of their financial difficulties. I upload the revised letter, and the negotiator sends me a message that the file has been sent to the investor.
February 2nd - I get a request from the negotiator to upload the sellers' 2010 W2 forms because the investor wants to see them. Fortunately, the sellers had received their W2's, and I uploaded those onto Equator.com.
February 3rd. It's after 5:00 p.m. when I get a message from the negotiator, stating that the investor has decided to decline the short sale because the sellers hadn't experienced any decline in income. WHAT??????? Good grief - what is this person thinking? Or is he/she thinking? Is there ANY kind of logic to this decision? The sellers haven't had any overtime for two years now, nor have they received any raises because of the economy. How can this not be considered a decline in income? They were making a lot more money in 2007 when they bought the property. They begged and pleaded for a year and a half with B of A to try and modify their loan, and all to no avail. I have never before had an investor come up with this kind of half-witted insanity in any of my transactions. I get most of my short sales closed (it takes time, no surprise there), but I do get them closed. I'm totally amazed at the outcome of this transaction - it makes no sense at all. Needless to say, the buyers are crushed and the sellers are afflicted with migraines and heart palpitations.
No folks, I'm not going to re-submit the package and hope for another negotiator or investor. There's simply not enough time. The sellers are going to attempt a Deed in Lieu of Foreclosure, and I hope they can get it through. Otherwise, their credit will be ruined far longer with a foreclosure than it would have if they had been able to complete their short sale.
Short Sale Disasters 101 -
Michele Ashbarry, Owner