Jill, Home Buyer in 89113

We got verbal approval over 6 weeks ago on a house and we still do not have a written approval. We are trying to make the June 30th deadline and it

Asked by Jill, 89113 Wed Jun 16, 2010

is looking like that is not going to happen. BOA keeps on requesting financial documents from the seller, almost on a weekly basis. The listing agent doesn't understand why but sends the documents same day or next day. What is going on?? How can it take over 6 weeks to get the written approval?? We have been in contract since end of January with the seller. Does anyone have any idea what could be going on?? My husband and I are so sick of this short sale process, but feel stuck at the same time!

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Damon Bottic…, Agent, Las Vegas, NV
Wed Jun 16, 2010
BEST ANSWER
Well you may be in luck due to a senate vote today to extend the deadline!
Read about it here:
http://www.reuters.com/article/idUSN1618072020100616

I specialize in short sales so I am very familiar with the Bank of America process including what can take extra time and what can go wrong. Because you have an agent and the seller has an agent that are closely involved with your transaction, they are your best source of information and solution to your concerns.

I can NOT speculate on your situation, but I can mention a few things I've seen happen in other cases:
1. Documents weren't uploaded correctly
2. Seller is pursuing a loan mod
3. Mortgage insurance company is involved
4. Negotiator quit, got sick, on vacation, etc...
5. Listing agent didn't escalate the file when communication broke down
6. Listing agent didn't understand that a counter offer in equator is only a starting point, not an actual counter from the underlying investor.

Let me say again very clearly...I am not suggesting or accusing that any of the above items are happening in your transaction. It is simply a list of things I've seen go wrong in OTHER transactions.

No question about it, there are MANY pitfalls that can come up in a short sale even when you have the best agents working on the file.

Good luck, and I hope the senate vote today has a positive impact on your transaction!

Damon Botticelli
Realty One Group
(702) 523-7713
0 votes
Joanna Morris, Agent, Inverness, FL
Thu Jun 17, 2010
Hi Jill,

I would say the first line negotiator has guidelines they have to follow and typically the counter is due to the fact that the offer was too low for it to be acceptable by the bank. This number should work throughout the process.

Each Realtor has their own way of handling short sales some are more effictive than others. Make a list of questions you have not received answers to yet and or would like to ask. Another of list of suggestions you would like your agent to discuss with the listing agent. Just remember you may not get all the answers but maybe you can gain more information and feel a little more settled. It sounds like normal short sale issues and low and behold you will have a surprise phone call one day.
0 votes
Jill, Home Buyer, 89113
Thu Jun 17, 2010
I appreciate everyone's answers and input. I forgot to mention that the "verbal approval" was actually a counter offer that my husband and I accepted. I've read on other short sale forums that sometimes a negotiator will make a counter offer, but then you receive the written approval from the bank and it is actually a different price and terms. Is that true? My realtor said it seems as though the listing agent has experience with short sales, but I'm not sure how much and if she taking all the right steps. Is it common practice to ask for our file to be escalated? Is this something the listing agent would know to do on her own? Does the bank actually accommodate that request?
My realtor sent me an article about the tax credit being extended, which brightened my day a little, but after reading Grace's comment I guess I shouldn't get my hopes up.
0 votes
Grace Morioka, Agent, San Jose, CA
Thu Jun 17, 2010
Hello Jill and thanks for your post.

As the others have mentioned, B of A's short sales are always problematic. The use of the Equator.com system, touted as being able to drastically reduce processing time, is, in fact, reducing much of the Phase 1 processing (the document gathering and logging portion of the process), but that still means that most B of A short sales take between 4-7 months to complete all three (3) stages of the short sale negotiation. While I understand how frustrating this is for you, I fear that you may have been misled in being told that there is a "verbal" approval for the sale.

As with all short sales, there is no such thing as a "verbal approval" from the lender. The lender may say to the negotiator, "things look good, and I think we'll get approval soon..." but until the approval letter is sent and received, there is, essentially, no approval. I might also add that I've yet to see any short sale with B of A where they did not lose the files and most often they seem to lose the financial statements. The average times faxed and emailed seems to be about five or six here in California.

Regarding the June 30 deadline, please note that the Senate Amendment 4344 to HR 4213, the home tax credit extension, proposed by Senator Reid has only passed through the Senate and has yet to be approved by the House. Because laws require the approval both the house and senate and president to be enforced, the provisions of the credit are not yet active. At present, the Thomas Guide with the Library of Congress shows the bill reviewed by Senate but has yet to set a date for review by the House.

While the credit is a bonus, it should not be the only reason one buys a home. In fact, with judicious care and improvements, your home should gain considerably more in value than the possible $8K refund.

I know the process of buying a short sale is very frustrating and complicated with B of A, but what you are experiencing is fairly typical for a B of A short sale, including their losing financial statements and also taking a very long time to create the approval letter. Have your agent continue talking with the listing agent and working diligently with the negotiator to obtain updates. I'm certain you'll soon see an approval letter and will be able to close on this home. In the meantime, keep your fingers crossed that the S,.Amnt is approved by the house in the near future.

Good luck!!

Sincerely,
Grace Morioka, SRES
Area Pro Realty
San Jose, CA
0 votes
Jason Allen…, , Las Vegas, NV
Wed Jun 16, 2010
Hello Jill,

One thing that has not been mention yet is that the June 30th Deadline has now been extended to Sept. 30, 2010. So there is still time to close the deal and get your tax credit.

The delay could be a change in the Seller's status, the lender could be looking into some of the eveidence to see if the SS is legit. Also, your SS may not be going thru the Equator system and is a hands on process. This is a time consuming tedious effort. However, as mentioned previously, your agent needs to get with the Listing Agent to find out exactly what is going on. The LA should know why he is having to gather information over and over and over from the seller. It is his time that is being wasted as well, and he needs to know why he is expending his resources.

I hope that helps, have a good night.

Jason Allen Gardner
Exit Realty Imoti
702-806-6968
Web Reference:  http://www.jagsellsvlre.com
0 votes
Heather Peck, Home Owner, Las Vegas, NV
Wed Jun 16, 2010
There are about 1100 negotiators across the country each handling up to 1000 files or more. They are not singling you out. Can you imagine trying to respond to 100-200 files per day?

I was involved in one deal where we got the verbal and after 5 months, still didn't get the written. The listing agent can try to escalate, if they know how, to get an answer.

Everyone is overwhelmed. Try to hang in. But if your agent knows how to negotiate short sales, they may be able to assist the listing agent with the escalation. It's important to have a good understanding of how experienced the listing agent is as much as how experienced the buyer's agent is when dealing with short sales.
0 votes
Joanna Morris, Agent, Inverness, FL
Wed Jun 16, 2010
Not all short sales go through the equator system with BOA.
0 votes
Joanna Morris, Agent, Inverness, FL
Wed Jun 16, 2010
You do not have to feel stuck. Ask your agent to get more facts from the listing agent and exactly what is going on with your sale. Does that agent have experience with short sales? Are they putting the loan number on each document they are sending and are they sending it to the correct fax number? I know they sound like stupid questions but the smallest thing needs to be looked at or you need facts from BOA and or specific direction. BOA is typically a little longer with their process but there has been improvements made.

Each short sale is as different as each house and seller. They have to be evaluated separately and together. Meaning the seller gets approved to do a short sale and the offer on the house gets approved. Sometimes there are multiple levels of review before the official written approval. The verbal could have been that BOA said yes seller looks eligible for short sale and offer seems acceptable. The next step would be for it to go the a different person or higher levels for review and approval.

Best recommendation is to have the Realtors communicate and find out what is needed.
0 votes
George Pojoga, Agent, Boca Raton, FL
Wed Jun 16, 2010
Jill, the short sale process can be very tedious and exhausting. First, I don't think that BOA gave anyone a verbal approval. They have a system on line where they post approvals or denials, it's called Equator. If the package that was completed you could get an answer fairly quickly or they can drag this forever. It all depends on the agents involved in the transaction. Please call me if you would like me to explain the entire short sale process

Thank you
George Pojoga
Certified Distressed Property Expert!
561-756-0196
0 votes
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