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Ernie, Home Buyer in Tulsa, OK

We made an offer on a short sale through bank of America. It was "supposedly" approved/accepted on April 7th---We demanded something in

Asked by Ernie, Tulsa, OK Wed Apr 28, 2010

writing to show they actually approved the sale---We were told not to worry and to move forward with inspections etc...Our close by date is April 30th and now the selling agent is saying they can not get a response from BOA for a "signer" and where to wire the money. We are concerned that we were lied to and never had a "DEAL" to begin with...Can a bank verbally approve a short sale price and truly just be slacking on the final piece so we can't close??....We have a signed contract but it is just with the Sellers signature (nothing from the bank at this point)

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Keith Manson- Metro Milwaukee Wisconsin’s answer
something does not sound right. There is no accepted offer until the bank issues the approval letter. The letter will indicated net proceeds, if the seller has any liability and when the deal needs to be closed. Never, go by a verbal because there are too many people at the bank and no real accountablity.


Keith Manson
First Weber Group
Certified Distressed Property Expert
Metro Milwaukee

http://www.milwaukeebailout.com
0 votes Thank Flag Link Fri Jun 18, 2010
The long explanation is great - Thank you. You have hired a lawyer and you should let the lawyer handle things for you. Your agent should not ask you to go against what the lawyer is saying. Get some clarification from both of them. Have your agent speak with the lawyer or ask your lawyer to step in and help you get what you need to satisfy him.

Why would the lawyer tell you something that would hurt you or keep you from getting the home?

Now I did have a short sale where the listing agent did not want to share the approval letter because it had privileged information for the seller. If this is the case, then your attorney should be able to come up with a solution to satisfy all parties. Possibly you can get some kind of documentation or letter letting you know you have a valid approval from the short sale bank. Keep in mind the deadlines set by a short sale bank must be met or you have to resubmit for approval and all the numbers could change.
0 votes Thank Flag Link Thu Jun 17, 2010
I have had a lot of issues with B of A with short sales. My best response is not to take the approval seriously and not to spend any money including the opening of escrow until you have an approval in writing from the bank.
0 votes Thank Flag Link Thu Jun 17, 2010
Hi, I’m very worried about this short sale cases.
I'm in a process to buy a short sale house. The house was listed at $220k and I offered $210K, they called my agent saying that they accepted my offer, so my agent told me not to worried. After days the agent from the seller called my agent saying that the house had more offers and the bank approved the short sale for $235K and they wanted to asking me first if I would like to accept the 235K and if I wouldn’t just to drop it. So, my husband and i accepted the deal.
My lawyer told me not to spend and do anything until we got a letter from the bank approving the short sale for the total of $235K, so the next day my lawyer talked to the agent seller and they told my lawyer that they will send a letter from a representative (Access Title Corp) saying that the bank approved the short sale for that amount. So my agent told me the letter is good and to process with the appraisal and inspection, but my lawyer is saying the this is only words and not good enough for me to process that what I need the a writing letter from the Bank approving the short sale for $235K. the problem is the agent seller is refusing to send my lawyer the Bank Letter approval. So I’m kinda worried of what to do. This is what the letter shows:
Please be advise that we have the purchase price approval of $235,000 from Litton Loan Servicing for the above property. The closing date must be no later than July 08, 2010 or this approval will be voided by the bank. Please see the attached HUD. We have added some credits towards the title on the buyer's side. Not that these credits are not guaranteed until the final HUD is approved by Lion Lean Servicing. As per our conversation, we appreciate you agreeing to use Access Title Corp. Since we have been doing the negotiations. Please let me know when your client has the Loan approval.

I know the my lawyer wants to protect me but I’m new on this ... So, my question is should I process what my agent is telling me so or as per my lawyer should I wait for the fax letter approval from the Bank and then do the process? I really want this house but I prefer not to spend my money for something I might not have.
Thank you for your time and sorry for the long explanation. ^_^
0 votes Thank Flag Link Thu Jun 17, 2010
Hi Erne;
The following must occur for a short sale to be "approved" as per the terms of the California Prurchase Agreement.
1. The Lender will have negotiated a HUD 1 (closing statement of costs) with the homeowner, stating that the homeowner is not receiving funds, and what the net proceeds at sale to each lien holder will be.
2. The negotiator(s) will issue to the seller and/or their agent or title company a written approval letter, which, in conjunction with the approved HUD statement, forms the basis of their offer of short sale and agreement with the seller. These are proprietary financial documents. Those documents belong to the seller, and are not given to the buyer, just as the buyer's loan application or loan documents are not given to the seller.
3. Per the short sale addendum, written notification is provided to the buyer that short sale approval has been received. This may be done in the form of an email to the parties from the seller's agent, the escrow, or as a certification from the title officer. Again, the buyer and buyer's agent do not receive the short sale approval letter.
The questions you need to be asking are:
1. What is the date of approval on the short sale letter?
2. Can I have a certification from the title company that the short sale letters have been received and are in good order?
3. What is the expiration date of the approval (this is the date that escrow must close before, and can be extended by the negotiator as they see fit)?

I don't think you were lied to; my guess s that you are dealing with a non-certified, inexperienced short sale agent.

Deborah Bremner
REALTOR, 00588885
(D) 818.564.6591
TheBremnerGroup@gmail.com
Blogging at: http://TheBremnerGroup.com/blog
0 votes Thank Flag Link Thu Apr 29, 2010
PEBBLE SINGHA
CERTIFIED SHORT SALE SPECIALIST
http://WWW.PEBBLESINGHA.COM

Hello Ernie,
1. Bof A in my experience has had problems where they respond late in sending in the final approval of the Final HUD 1 submitted by the escrow. It is normal. Sometimes they have taken upto 2 weeks to do so.
2. call the escrow and as Escrow agent needs to answer your question " is this sale approved and if it is then i would like to see the approval letter"
3. The listing agents may refuse you the letter based on the fact that it has sensitive info for the seller that the seller may not want to share with you. The counter to that is that he blacks out only the sellers personal info and provide you the letter. Your lender should require that letter. Most of the lenders do.So tell them that your lender requires one.
4. ask in a notice to perform to the seller to deliver to you a valid approval letter.
5. you should not have opened escrow without seeing a letter or the escrow confirming that they have a copy of approval on thier hands and that it is valid until what date at what price and if your name is on it.
6. if they still refuse to do so then there is hank panky. Have your broker talk to the listing agents broker.
7. last resort get your money out of there and go for another property.

For more Short sale questions and answers go to http://www.pebblesingha.com
Web Reference: http://www.pebblesingha.com
0 votes Thank Flag Link Thu Apr 29, 2010
Ernie,

Did your contract include a Short Sale Addendum? How was a close date established if you don't have bank approval? Until you have written approval from the bank, nothing can/should happen. DO NOT WIRE ANY MONEY! Did you provide a deposit?

You may not have been lied to and it is possible the bank negotiator provided verbal approval. However, it is not truly an approval until it is in writing. As a buyer representative, I am in contract now on a short sale. We have received a verbal approval. Great...but nothing is happening, no money changing hands, no inspections being paid for, etc. until we see it in writing.

Get as much detail as possible so you can understand what has transpired clearly. If you really want this home, ask your agent to start pushing and do not make another move until you have something in writing.

Sincerely,
April Tavares, GRI
Realtor, DRE License #01742179
Web Reference: http://www.AprilTavares.com
0 votes Thank Flag Link Thu Apr 29, 2010
I have to second input from JoAnna! 1) from a buyer perspective it appears that the Listing agent staying on top of things is critical - we have had several mishaps which I THINK could have been avoided...(unfortunately you may not have control over this). 2) you must stay on top of your lender to be sure your loan stays current - and realize that might cost you extra $ (e.g. lock in fees, repeating appraisals). We lost a closing opportunity 8 months into the deal when we were given 10 days notice to close and our loan (appraisals etc) had expired.
0 votes Thank Flag Link Thu Apr 29, 2010
Hi Ernie,
The most important thing is that the Listing Agent stays on top of everything. However,I have two short sales going right now and one negotiator ist working that well try and get the home closed. He attitude is, "I have x many files onmy desk and when I get to you I get to you".
However the next short sale is flowing smoothly. I believe it is how you (as the listing agent handle the short sale from the very begining).

You do need to stay in touch with the lender. Things can fall apart. Not only stay in touch with the lender but know the new laws going on. With HAFA things should be a lot smoother. The negotiator only has 13 business days to get back to you. Of course this is if the loan qualifyes for this program.

All loans and lenders that are currently doing the Making Home Affordable program must then offer the HAFA program if the Owners either are not approved for a loan mod, didnt make all of the payments or simply decide they prefer to short sale.

The HAFA program is fairly new and banks will roll it out at their pace but I believe any contract written after the new program was adopted may have to go by the new rules.

Best of Luck

JoAnna Jensen
Realtor Legal Assistant
Home Retention Counselor
925 699 5041
Short Sales, Short Refinance, Principal Reduction, Loan Modifications

Helping Home Owners Stay IN Their Homes..
0 votes Thank Flag Link Thu Apr 29, 2010
BEWARE! We submitted an offer on a BOA short sale house last JUNE. We found out in JAN that it had been approved in Nov but written paper was never sent and the approval expired! I will spare you the very ugly additional details (be happy to share more if you want to hear), but bottom line is that we finally got written approval about 3 weeks ago and were supposed to close this Tues but learned 2 hours before closing that the house was actually sold at sheriff sale last week! My only advice is 1) to the extent you can (which might be limited...) be sure the seller's agent stays ON TOP OF THINGS! 2) try not to get too emotionally invested - I cannot tell you how many ups and downs we've been through. If you don't absolutely LOVE the house, be ready to walk away!!! I wish you better luck that we have had!!!!!!
0 votes Thank Flag Link Thu Apr 29, 2010
Good evening Ernie,

I had this very thing happen on a short sale. I had the buyers but the title company is one I work with all the time. They had difficulty and it took several days after closing to get final approval on the closing statement from the short sale bank. It was very nerve racking and scary not knowing whether the buyers actually owned the home. The title company was a trooper and just kept calling until they got results. Whoever has been having contact with BOA should escalate their calls until they talk to supervisors and supervisors of supervisors or managers. You get my drift. Many short sales go along fine just as regular transactions but they take a little longer. Hang in there and get an extension if necessary to be prepared. The bank would prefer it close before month end so make sure someone is staying on top of it. Also sometimes the negotiator will go on vacation, have an emergency or simply no longer be with the bank. There are a million reasons for delays the trick is finding out the problem.

Good luck and hang in there.
0 votes Thank Flag Link Wed Apr 28, 2010
Hello Ernie,
All short sales are frustrating and short sales with B of A can be even more frustrating, but you could be near the end. Ususally the bank will send written notice approving the short sale and sending their final demand for the amount they will get and state the date the deal should close by. B of A is slow and less respectful of the people it's selling to, etc. You might ask your agent to ask the listing agent for an update (which I'm sure you've done), but if the bank gave a verbal, --they're probably just lagging behind in paperwork. I'd imagine that if you were "lied to", the truth would have come out by now.
I wish you well and great happiness in your new home.
Let us know what happens.
Yours,
Lynn LeGlaire
0 votes Thank Flag Link Wed Apr 28, 2010
When Bank of America approves a short sale they will provide a written approval with a demand for a certain "net" figure to go to them upon close of escrow. It will state some other provisions, closing date, buyer's and seller's information, etc. Your agent should absolutely provide you with a copy of this approval letter as it is indicative of a mutual agreement necessary for all parties to proceed to close. Bank of America will not verbally approve a short sale, never. Your signed contract with the sellers is subject to final bank approval. Without a formal written approval from Bank of America and until then, you should not proceed to close.

Ask your agent when the notice of default was filed on the property and if there is a trustee or foreclosure sale date set yet. This will show you how up to speed on your file. Any competent agent will have this basic information foremost in their file.

When any representative or agent tells you not worry, then make them back up their statement with written proof why you should not worry.

Good luck to you! I'm sorry for the frustrating feeling of being in the dark or misled.

Diane Wheatley, Broker
diane@moveupproperties.com
(888) 981-5589
0 votes Thank Flag Link Wed Apr 28, 2010
The short sale adventure may be the revival of the "trail of tears" with so many disappointed potential buyers looking for someone to point the finger at.............isn't it about time for some accountability?

Just yesterday we head two conflicting reports from the same agency.....one stating the short sale has been approved while the other indicating that it had not been approved. Why should it be so difficult to get accurate information?
0 votes Thank Flag Link Wed Apr 28, 2010
Ernie I have had "verbal approvals' on several of my short sale listings. Sometimes we do have to move forward and the bank does "slack off". It is true that we need an approval in writing before we can close, and many times the bank will miss a signature or "accidentally" close out a file. Bank of America is unorganized and takes more time than any other bank I have dealt with. Be patient; I am hopeful that you do have a deal and you will soon be living in your new home.

Dyanna
0 votes Thank Flag Link Wed Apr 28, 2010
A short sale is not approved until you have an actual approval letter stating all of the instructions that must be followed for them to accept it at closing. The letter will also have the date that you must close by (typicaly 30 days from the date of the approval letter).

It's sad that your agent actually told you to move forward on a deal that you don't know if you will get.
0 votes Thank Flag Link Wed Apr 28, 2010
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