Home Buying in 33624>Question Details

Kathryn Schu…, Home Buyer in 34748

We are currently trying to purchase a short sale condo in Coconut Creek Fl. We offered a price and signed a contract with a $5K doownoayment on 4/20/

Asked by Kathryn Schuller, 34748 Sun Aug 8, 2010

with a tentative closing date 45 days after 4/20. On the 75th day after the bank came back with a 10K higher price witha closing date of 8/31/10, we agreed to higher price but still haven't rec'd final approval from bank...our realtor and title co have been trying to contact bank/negotiator/investrs but so far nada reply....is this some kind of scam?Why can the bank keep our money inescrow w/o replying within stated timeframe but we can't bid on other properties until/unless we receive reply...this will be a cash sale w/o any financing. Do we need an attorney? Can the bank request another increase in price, when we're under contract with a "good faith" down pymnt and proof of cash available provided to them in April? How come the banks are above the law? What gives? We're the only bidder and this is getting stupid but then again it is Bof A....they along with incompetent lending practices are a big part of the whole problem....Who can I contact for some real results from the bank

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Dear Kathryn,

Be very, very careful as an ALL CASH buyer. You absolutely need an attorney to review the Title Commitment and your closing documents. Larry Fuentes is one of the best (and most experienced) Real Estate attorneys in Tampa, you should retain him once you receive a copy of the written approval letter from Bank of America.


Bank of America may not be the actual owner of the mortgage but merely a "servicer" who submits to the actual "investor". Also if there is PMI, the Private Mortage Insurance company must also approve the short sale. And... if the Seller is required to sign a Promissory Note to rep-ay all or part of the loss, that could also make your sale impossible if the seller is unwilling to sign the promissory note at closing.

Short sales go through an online system with Bank of America, Equator.com. Unless the Seller has given you specific written authorization to discuss their account with BofA, you have must sit on the sidelines and hope all parties do what they're supposed to do. It's unfortunate that you put $5k in escrow (never advisable on a short sale) because should the investor on your mortgage (probably not BofA) decide to go ahead and foreclose, some Sellers may try to coerce you to give them part of your $5k. You see, without the Seller's signed consent, the title company cannot release your deposit without a court order!

The beauty of Bank of America's Equator system is it allows the listing agent to upload all requested documents and email the supervisors, the managers and the actual asset manager for the investor that owns the property. Some agents are less experienced than others and my not know how to do this. So, you may want to suggest to your Realtor that she contact the listing agent to see if she has sent emails up the chain of command. That usually moves things forward.

Also, some short sale listing agents are engaging in fraud--especially with ALL CASH buyers. The FBI is investigating the listing agents, Sellers and insider investors "flipping" the property. What happens in these situations is the listing agent and investor work together to defraud the mortgagor by submitting false repair estimates, dragging out the sale of the property to coerce the lender to accept a lower price, and not disclosing they already have your higher offer in hand.

Finally, there is rumour and speculation going around that there will be an August Obama Surprise that will allow owners to reduce their "principal" to current market price. Should the seller get word of this (hopefully his Realtor has already advised him of the rumour) he may decide to no longer do a short sale and keep the house.

Bottom line, you need to keep looking for the right property up until the day you receive the Short Sale Demand (approval) letter from the lender. Your contract should give you the right to cancel up to a week after you receive the approval letter. You must check your short sale addendum to verify your cancellation rights. Just be sure NOT to put up an escrow deposit on a short sale.

Hope this helps.

All the best,
Future Home Realty
0 votes Thank Flag Link Mon Aug 9, 2010
Hi Kathryn,

I was under the impression all short sales with B of A go through Equator (an automated process usually intiated by the Seller's Real Estate Agent (sometimes the title company will do it, and the file is still assigned a human negotiator). I think the previous answer of finding out who the negotiator for the Seller is important. Here are some addtional answers to your questions:

1. The bank can increase the price, before the final approval. It happened to me, it was $5,000 more-but still well worth it!
2. It is typical to get the final approval letter shortly before closing, especially with Cash. You still have a few weeks. If your closing date comes and go with nothing concrete (something in writing), maybe you should withdraw your offer and start bidding on other homes. Difficult decision, I know.
3. A short sale purchase is anything but typical, but it can be a wonderful opportunity to buy the home of your dreams for a good price. Good Luck! Come back here and let us know where you with your negotiations on Sept. 1st.


Megan Eister
Broker, Florida WestShore Realty
0 votes Thank Flag Link Mon Aug 9, 2010
The only ones that can help you are the representatives of the seller. It isn't always a case where peope do not want to help but sometimes they are not ethically allowed to. It sounds like your realtor is useless so first go to his/her broker. Then contact the seller's agent, if that doesn't help go to his or her broker. to intervene not only on your behalf but the seller's as well. Communication is the main ingredient in getting a short sale to the finish line. If buyers and sellers are kept informed of the process they are less likely to walk away. If nothing else works then consider contacting an attorney that specializes in short sales. I was advised recently that BofA has computerized their short sale process and it is actually taking less time for them to close. Obviously more misinformation.
0 votes Thank Flag Link Mon Aug 9, 2010

They will not answer or help you since you are the buyer.
0 votes Thank Flag Link Mon Aug 9, 2010
Hi Kathryn,

I know the frustration you're going through. If you are on Twitter, try sending a tweet to: BofA_Help.

It usually takes several hours to two days, but you should get a response from someone who will try to help you with the situation.

Good Luck.
0 votes Thank Flag Link Sun Aug 8, 2010
This happened on a short sale that I worked. Many times negotiators will no longer be handling the file and it will get misplaced or in our case they approved the sale but never forwarded the written approval letter.

We escalated the file up the bank change of command until we got an answer and someone else forwarded us the approval letter and we closed. It is almost always a communication problem and you just need to get to the right person to handle the file. Since you are the buyer the other Realtor - the one working with the seller - will have to escalate the file The Title Company can assist with getting the answers. The squeaky wheel gets the grease.

It is not a scam it is just that they are so overloaded with files. Most of the timeframes are put in the contract to protect you in short sale. You are at the mercy of the banks timeframes for approval and closing but you can get out of the contract and get your money back if you want to. (I do have to say you would have to speak with your Realtor or an attorney to verify if your timeframes have passed. If the house is worth it, then get the Realtor and Title Company to escalate the file and get you some answers.

You should have your Realtor verify whether the bank has asked the seller to sign a promissory note and the seller is refusing. This will stall the process.

The only other reason I can think of for the long wait is that you actually got a verbal counter from the bank and they are sending the file through the rest of the approval process all the way through to the investors holding the loan. Your Realtor will have to call the listing Realtor and get the facts for you or call the Title Company and see if they know what the holdup is with the file.

I hope this helps.
0 votes Thank Flag Link Sun Aug 8, 2010
Who was doing the short sale negotiation for you, your agent, the listing agent, the title company or a third party. They are the ones that "should" have direct contact with the bank negotiator; not all four, it only mucks up the process. B of A does have a history of taking a very long time to get approvals, I have two pending now, one that has lasted over two years because buyers keep walking. If you must have that particular house then have patience. If the bank comes back with another higher offer you can accept it, counter it or reject it. If you do not reach an agreeable purchase price you will get your escrow deposit back and can then move on to another property, if this happens make any future contracts on short sales state escrow will be deposited on final bank approval only. You can also withdraw your current offer if the deadlines for approval have passed and you have not signed an extension. Talk with your agent about this option.

Good Luck?

Steven J. Pahl e-PRO
Keller Williams Tampa Properties

813-319-6423 Office
813-763-7245 Cell

Web Reference: http://www.StevenPahl.com
0 votes Thank Flag Link Sun Aug 8, 2010
The average time period for a short sale in Florida has been about 103 days from beginning to end. If you have a realtor and he/she cannot get information from the lender or at least from the seller's realtor then approach your realtor's broker and ask them to step in. Maybe your realtor isn't as familiar with the short sale process and isn't following up the way they should. It does take a long time for a short sale but based on the information you have provided the case management person should have already been assigned by the lender and should be able to tell you the status of the transaction. If you do not get answers then I would suggest that you contact an attorney that specializes in short sales. I know of two that I have worked with if you would like a recommendation.
0 votes Thank Flag Link Sun Aug 8, 2010
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