Short Sale Question: Bank keeps coming back requesting SAME information over and over again after its been submitted numerous times!

Asked by Jmart, Miami, FL Sun May 22, 2011

They keep requesting new more current bank statements, new tax returns, etc. Times keeps passing and it seems we're going in circles! What can this mean? Any thoughts on how I can get this process moving along?? THANKS!!!

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RAQUEL CORON…, , Miami, FL
Mon May 23, 2011
BEST ANSWER
Good Morning Jmart!
If the professional that is handling your shortsale file is going in circles with this kind of requests dfrom the bank, he can place an escalation request" with the bank, so the paperwork is reviewed by by the supervisor of that representative or someone in a higher postion. Also please note that in the last two days it was published that an amendment by the Obama administration is requiring from the banks to provide all the homeonwers part of the HAMP or HAFA program only ONE CONTACT NUMBER for whatever transaction you are doing with the bank, to avoid the kind of situations you are currently going through. They have until Nov. 1st to comply with this new regulation. Unfortuantely, untill your lender adjusts to this new regulation, the person working on your shortsale should send them the paperwork as many times as requested or sned an escalation request previously mentioned.
I am highly experienced in shortsales and in the process of it too, please feel free to call me any time.

Raquel Coronel P.A. Realtor
(305) 989-5894
1 vote
Carmen Brode…, Agent, Scottsdale, AZ
Thu May 26, 2011
That happens all the time! Short sales are nightmares.
3 votes
Gladys Viru…, Agent, Scarsdale, NY
Fri Jun 3, 2011
Sometimes there is such a lapse in time that the banks then require new documentaion to show last 2 W2 and salary stubs. They are just staying on top of things to make sure there are no fraudulant mortgages being requested. Good Luck!
Gladys
2 votes
Keith Canty, Agent, Newport News, VA
Thu Jun 2, 2011
One of the things I have found to be effective in eliminating the lost paperwork shufle is to expressmail or fedex the information to the loss mitigation department with a signature required. It may take a day longer to get to the destination but it doesn't get lost again. I do this with all my short sale documents. I send it the way they ask and back it up with hard copy to a physical location with acknowledge receipt.

Good luck
2 votes
Susan Agli, Agent, Bend, OR
Fri May 27, 2011
Ask the bank if they are stalling. Really it worked for me. I attended a class on lender fraud, etc. and if the bank keeps asking for the same information over and over again they just may be stalling which is a big no no.
So ask them if they are stalling and I bet you will get a quick response, if not you can contact your State Attorney General's office consumer complaints for assistance.

Susan Agli, Broker, SRES, ALHS
Coldwell Banker Morris Real Estate
Licensed in the State of Oregon
2 votes
Thank you! Helping my elderly mom with this and the bank has been horrible. They got her to quit the process the first day with their unceasing requests for the same documents that were already accepted by the under writer. State AG is exactly what I needed to know. We are 5 months in and she has done every single thing she was asked....while continuing to pay her mortgage and living on nothing.
Flag Fri Feb 10, 2017
Jmart, Home Buyer, Miami, FL
Mon Jun 6, 2011
Thank you Keith and Gladys for your great input!
1 vote
Dawn Ohnstad, Agent, Wayzata, MN
Tue May 31, 2011
if you are not working with an agent who specializes in short sales this may be part of the problem. Having said that, it is just plain a fact that dealing with the larger banks can often go just as you described no matter what you do. It is part of the pain of short sales and the reason why buyers need to be prepared for enormous frustration in getting to a closing. And be prepared to have the deal fall apart at any time even if you do everything right. Short sales are for those with patience and plenty of time to wait as long as it takes. Otherwise don't even start down that path.
Web Reference:  http://www.ohnstadhomes.com
1 vote
Michelle Gon…, Agent, Los Alamitos, CA
Tue May 31, 2011
Hi Jmart,
I see you are the buyer in this transaction, so is the bank asking the "seller" for current bank statements and tax returns? Banks usually want the most recent financial statements and is pretty standard. Short sales do take several months to be processed. You may want to ask your agent if the BPO (Broker Price Opinion) has been ordered yet. That is one way to tell when things are moving along.
1 vote
Gary Geer, Agent, Antioch, IL
Mon May 30, 2011
Jmart,
Great Question! In my experience if the bank does not receive everything in the order they want it in, the processor moves your request to the bottom of the pile of many request. They only move forward with packages that meed exactly what they ask for and in the proper order. Review all instructions from the bank and have your agent submit exactly as requested.

I know it's frustrating, but hang in there to be successful.

All the best,
Gary Geer

http://www.GaryGeer. com
1 vote
Susan Asch, Agent, Lakeside Park, KY
Sat May 28, 2011
I have been involved in dozens of short sales. As a buyer, purchasing a short sale can be a truly frustrating experience. The payoff at the end is usually a great deal for you. Many banks are efficient at going forward with the information and getting the deal done in a timely matter. I have seen this mostly with local or regional banks. Many of the larger banks receive thousands of offers a day on property, and frankly my experience has been they lose the info and request he same info over and over, or you go to the bottom of an overworked negotiator's pile and by the time they look at your file, your info is outdated and they have to have current info. The cycle starts all over again. I have seen sales go six months and all of a sudden a payoff comes and you will be able to close. Don't lose heart, keep calling (the squeaky wheel. . . .) and good luck!
Web Reference:  http://www.susanmls.com
1 vote
Scott Godzyk, Agent, Manchester, NH
Thu May 26, 2011
You should be using a professional negotiator to represent you, this elimnates problems such as this. If they do not receive everythig they need, like if 1 thing is missing, what they do get is often filed away and then they request again becuase something was missing.
1 vote
Alma Kee, Agent, Tampa, FL
Thu May 26, 2011
A Private Mortgage Insurance company (if the owner put down less than 20%) has to approve the short sale, too. I believe the insurance will not be paid to the underlying lender unless the lender forecloses and then makes a claim to the PMI company. The PMI companies know they have leverage and will make unreasonable demands that the seller sign a promissory note for almost all of the PMI company's loss. In Florida we are a deficiency judgement state so an owner cannot simply walk away because the lender can get a judgement for 100% of their loss and go after the seller for many many years in the future. Although the PMI company may get a financial incentive from the lender approving the Short Sale, they may just chose to take a larger loss in the future. They would rather delay the payment than pay the claim via a short sale because it would require an immediate realization of their loss on their financial statements.

We are now at the point where we need our Federal Government to step in and mandate standards on Short Sales. This 3 year (with no end in sight) drama is pulling our real estate values lower and it's senseless, really. Why do we elect representatives if they can't even manage our Country's affairs properly!
1 vote
Jmart, Home Buyer, Miami, FL
Thu May 26, 2011
Hi Alma! I believe that they did not put 20% down, but I am not certain. Assuming they did not, how does that affect the dynamics of the situation? THANKS!!!
1 vote
Alma Kee, Agent, Tampa, FL
Thu May 26, 2011
Did you find out who the actual owners are of the mortgage? Ask your agent to verify who the underlying investors and if there is a PMI company. This is easy to verify, if the owner purchased with less than 20% down there is definitely PMI. Public records will show the original mortgage and purchase price.
1 vote
Jmart, Home Buyer, Miami, FL
Thu May 26, 2011
Now they are requesting a "new" contract because our contract suposedly expired after 90 days!! Go figure!!!
1 vote
Jim Simms, Mortgage Broker Or Lender, Louisville, KY
Wed May 25, 2011
Most likely the servicer is trying to decide to work the offer or foreclose if the seller is not current on the loan. If the seller is still making payments in a timely manner there is no urgency from the lender’s perspective. We all look at these transactions from a buyer or seller perspective, rarely from the lender’s point of view. The amount of the offer compared to the market value is a huge factor in a lender’s decision process. There is a line where they are better off foreclosing on a loan. If the bank will recoup more of their investment by foreclosing that is the right decision for them to make. If the average market concession in a neighborhood is 5% and the average marketing period is 6 months or less why would any bank consider a very low offer in a short sale? They would be better off hiring a good realtor to sell the house after they take it back.

Also, the high number of strategic short sales has made ever lender more cautious, that is why they check and double check and document everything. It is a lot easier to prosecute fraud if they get copies of everything possible. I frequently have people call me saying they just finished selling a property through a short sale and have a pile of money for down payment wanting to know if they can get a loan to buy another house. Go figure. I don’t think I would start a loan application saying, “I just cheated my last lender, will you lend me money?”

Those people are the ones making it hard for everyone else, not the lenders.
1 vote
Tammy Hayes, Agent, Port Charlotte, FL
Wed May 25, 2011
When a short sale extends over a long period of time, the bank requests more current statements to be sure that your financial situation has not changed. Do you have an offer on the home? The best way to keep the process moving along is to comply with the banks request as soon as possible. This has happened to several of my short sale listings where the seller has had to keep providing additional information. It is not uncommon.
1 vote
Lila Lopez, Agent, South Miami, FL
Mon May 23, 2011
Good Morning,

I can definitely relate to what you are stating here as it relates to the short sale process. I have had transaction that have had these sorts of bumps, but I have also had transactions where things have been dones in short order. I recently closed a short sale in slightly over 90 days, and that is from the moment placed the listing on the market to the day of closing. The key in all of this is how documents are provided to the lender and vital is to ensure to follow up with the bank that they have received the documents needed. Sending in a complete package from day one, does facilitate things greatly. Where I am the listing agent, I send in my documentation, and within 48 hours, I am making the follow up call to ensure the documents have in fact been received and properly allocated to the file. I place files on a follow up system to ensure that I am in contact with the assigned negotiator and that they know if they require additional information they will get it.

I think it is easy to strictly blame the banks on this , but I have also seen the case where the agents or companies handling the processing/submission of documents fail to submit the information requested by the bank's negotiator. If they do not get the documents as requested, yes it will cause a delay. Following the banks' process is vital to getting things done sin a shorter time frame. I have found that in the past 6 months, my short sale transactions are moving along a lot quicker.

I wish you luck in your search and hopefully you will hear back from the bank soon.

Lila Lopez
RE/MAX Advance REalty
1 vote
Alma Kee, Agent, Tampa, FL
Mon May 23, 2011
Just read the mortgage is "owned" (did you do a lookup to verify they are the owner?) by Indymac.... you may have an even bigger problem, because Indymac was taken over by the FDIC and is now owned by OneWest in a sweetheart deal that may actually give OneWest a financial incentive to simply foreclose rather than allow a short sale.

The important thing to determine is if the seller is going under the HAFA short sale program. There can't be a tenant living there and it can be vacant but the owner must have lived there as their primary residence in the past 12 months. The seller must have a genuine hardship (PITI and HOA/condo fees must be more than 31% of the monthly income) and there will be resale restriction so the buyer cannot resale any sooner than 90 days after cloisng.

Also if you're paying ALL CASH, there could be other possible fraud going on. Some listing agents will work wtih an insider investor to get the lowest possible price approved by the lender and then immediately (within 7 days) flip it to an ALL CASH buyer.

If you're paying ALL CASH you absolutely need an attorney to review your closing documents and the title insurance policy, too.

Good luck and keep looking until the day you get the approval letter in your hands!

All the best,
Alma
1 vote
Jmart, Home Buyer, Miami, FL
Sun May 22, 2011
Thanks for the great responses everyone!!
1 vote
Gerard Carney, Agent, Spring Hill, FL
Sun May 22, 2011
Make plenty of copies and have them ready, this is just the bank burping and looking for time to kill! Though you may want an attorney to look over all you are handing in and ask if there is something missing!
1 vote
Ray And Karen…, Agent, Mount Dora, FL
Sun May 22, 2011
Hi!

This is pretty standard. Probably one of the many reasons the housing crisis has gone on so long.
1 vote
Yolande Citro, Agent, Miami, FL
Sun May 22, 2011
Answers below are right: every 30 days update.
Web Reference:  http://www.yolandecitro.com/
1 vote
Debra B Albe…, Agent, Port St Lucie, FL
Sun May 22, 2011
You must be selling a short sale. It is required that the financials be current. The best thing is to just send in your updated bank statements and your obligations every month. The info needs to be no more than 30 days old. Send your paystubs too!

Debbie Albert, PA
Keller Williams Treasure Coast
1 vote
Danielle Sha…, Agent, Cape Coral, FL
Sun May 22, 2011
Sad to say that's par for the course. Bank statements & paystubs must be renewed every 30 days although tax returns are only needed once per calendar year. Keep in touch with your lender, have your agent keep in touch with the lender & things will keep moving.
Web Reference:  http://www.mysharphomes.com
1 vote
Jmart, Home Buyer, Miami, FL
Wed Jun 1, 2011
Thanks so much Dawn and Jim for the input! I will try to be patient!!! Hopefully this will all be worth it in the end and it will be approved at some point!!!!
0 votes
Jmart, Home Buyer, Miami, FL
Wed Jun 1, 2011
Hi Michelle! Thank you so much for the feedback! Yes they are asking the seller for the same and more current information constantly! Im pretty sure the BPO has not been ordered yet! We are now in the process of submitting a new contract, since the old one "expired" according to the bank after 90 days! How frustrating!!!
0 votes
Jmart, Home Buyer, Miami, FL
Mon May 30, 2011
Thanks for the great input Gary!!!
0 votes
Jmart, Home Buyer, Miami, FL
Sat May 28, 2011
Hi L.Susan and thank you so much for your reassuring words! I will stay persistent and not lose my hope that the sale will go through in the end! Thanks again!
0 votes
Jmart, Home Buyer, Miami, FL
Sat May 28, 2011
Thanks so much for your help Susan! I will try that!!!
0 votes
Jmart, Home Buyer, Miami, FL
Thu May 26, 2011
Thanks for your input Scott!
0 votes
Jmart, Home Buyer, Miami, FL
Thu May 26, 2011
Thanks Alma! I really learned something new! I will definitely look into this matter!!
0 votes
Jmart, Home Buyer, Miami, FL
Wed May 25, 2011
Hi Jim and thanks for your input! Hopefully our offer is at or close to market value! We based it on comparables. If the bpo comes in higher, hopefully they'll counter and we can work with that!
0 votes
Jmart, Home Buyer, Miami, FL
Wed May 25, 2011
Tammy did your short sale get approved eventually even after so many information requests? thanks!!!
0 votes
Jmart, Home Buyer, Miami, FL
Wed May 25, 2011
Hi Tammy thank you so much for the information! Yes I have an offer on the house. I just hope the sale progresses and moves forward instead of the bank continuing to ask for the same information each month and we continue on this vicious circle! Thanks so much for your input!!!
0 votes
Jmart, Home Buyer, Miami, FL
Mon May 23, 2011
Thanks Lila! That is excellent advice and I truly appreciate it!!! It's extremely helpful!
0 votes
Jmart, Home Buyer, Miami, FL
Mon May 23, 2011
Hi Raquel! Thank you so much!! That is excellent advice and thank you for the information on the new law! That is great and hopefully the bank will enforce it soon enough! One contact person is essential and we've been dealing with too many different individuals, thus, nothing moves on, inefficiencies abound... frustration!!.... THANKS SO MUCH!
0 votes
Jmart, Home Buyer, Miami, FL
Mon May 23, 2011
Hi Alma! Thank you so much for the great advice!! I will definitely consider all of your recommendations!!! Thanks again!
0 votes
Alma Kee, Agent, Tampa, FL
Mon May 23, 2011
The underlying lender on my short sale was Fannie Mae with Chase as a mere middleman "servicer". Fannie Mae finally clamped down on servicer abuses and this loan was then transferred to IBM lender services and they seemed to be a bit more responsive and not constantly "losing" paperwork. Utilmately, though, the sale did not close and it's in limbo because the Seller was required by the Private Mortgage Insurance company (this is another important question to ask because it can cause a problem) to sign a $60k promissory note and the seller refused. The Seller is now fighting the foreclosure lawsuit in court and it could drag on another year or so... The current buyers are not willing to wait so the house is temporarily off the market until the seller decides how he wants to proceed.

A few important things with making an offer on a short sale, 1) DO NOT give any earnest money until/if you ever get a short sale approval letter listing you as the buyer and an addendum signed by the seller that he agrees to the terms of the short sale approval because the seller can attempt to coerce you to give him some of that money because technically (although you may be legally entitled to get your deposit back) the Seller must sign a release for you to get your money. 2) DO NOT put any money into inspections or appraisal until/if you get an approval letter 3) Most importantly, you need to keep searching and making offers on homes until the day you receive your short sale approval letter in your hands because there may be an even better property that you can actually buy come on the market and it would be a shame to miss the opportunity.

Also you need to plan on the house being left vacant without any electricity if the seller decides to move out. And although the contract may specifically state the appliances, window treatments and light fixtures are included in the sale, often short sellers will go ahead and sell all of those things on craigslist. And worse scenario is after you make your offer the seller will then rent it out to a destructive tenant with dogs, cats and other animals that may chew the woodwork and cause smells that may be difficult to remove.

And... do not think you can actually buy the house at even the full asking price because until the price has been approved by the lender(s) (they will do a full appraisal or get multiple broker price opinions to determine value) . The asking price on a short sale is "ficticious".

Your best be is for a true bargain to go for a property already foreclosed by the bank. Even an ugly fixer upper can still be bought with only 3.5% down with an FHA 203k mortgage where you an include the granite counters, hardwood floors, new bathroom cabinets and tile work, new roof, new air conditioner, etc. You could turn an ugly home (ideally in a nice neighborhood) into a show place and not have to lift a finger.

If you're less concerned about getting a bargain and want a property in good condition then look at the few "regular" sales with owners that have equity and do not have to do a short sale. Short Sales are not for the risk averse.

Hope this helps.
Alma
0 votes
Jmart, Home Buyer, Miami, FL
Mon May 23, 2011
Alma did the short sale you were involved with get approved?
0 votes
Jmart, Home Buyer, Miami, FL
Mon May 23, 2011
Hi alma, fyi, the owner is indymac, thanks!
0 votes
Jmart, Home Buyer, Miami, FL
Mon May 23, 2011
Hi Alma! Thank you so much for your great feedback! The bank is actually indymac which has a bad rep as well!! And yes I am the buyer and any other tips you may have are greatly welcomed!!!
0 votes
Alma Kee, Agent, Tampa, FL
Mon May 23, 2011
Let me guess.... it is NOT bank of america or Wells Fargo.... Could it be... Chase? Chase did this to my seller, too. I sometimes think these "servicers" are intentionally delaying short sales so they can continue to collect their servicing fees from the actual owner of the mortgage (oftentimes Fannie Mae and Freddie Mac) for as long as possible. Who actually owns your mortgage?

Also make sure you tell your "servicer" (the company you are submitting your paperwork to) that you want to go under the HAFA short sale program so you can get $3,000 at closing for "relocation". It will put time constraints on when they have to respond. I

Good luck!
Alma

PS I see that you are a "buyer"... if this is going under Bank of America then ask your agent to ask the listing agent for a "screen shot" (print screen) of the Equator screen. Sometimes sellers will delay, too, if they are collecting rents from a tenant.
0 votes
George Sauvi…, Agent, Miami Beach, FL
Sun May 22, 2011
Thats's ONE reason that "short sales" are not always the "bargain" people think they are!
0 votes
Jmart, Home Buyer, Miami, FL
Sun May 22, 2011
Thanks Debbie! Great answer!
0 votes
Jmart, Home Buyer, Miami, FL
Sun May 22, 2011
Thanks everyone for such great feedback!!! It's been extremely helpful! I guess patience and persistence is key! Thanks for clarifying that new info is needed every 30 days!
0 votes
Ron Thomas, Agent, Fresno, CA
Sun May 22, 2011
You are experiencing one of the frustrations about dealing with forclosures. I tell my clients, from the start that we have to be patient. The process with REO's and Banks takes a lot longer and has a lot of bumps and turns: Your offer is not handled by only one person at that bank. It is handed off many times. The only person with AUTHORITY is the NEGOTIATOR who gets approval from the INVESTOR. The rest of the people are gathering information for them. Also, that want the most up-to-date info. If you want that house, look at it from their point of view and be patient.
0 votes
Bob Galivan, Agent, South Miami, FL
Sun May 22, 2011
1. Pounding your head against a wall helps...

2. After that, you can contact the office of the president for whatever bank you're battling (go to Hoovers.com to find). You won't get to the prez, but you will get to their "interceptor" who can take the information to escalate. You have to be really persistent (like Tim Allen said in Galaxy Quest: "Never give up! Never surrender!")

3. Your negotiator needs to be extremely aggressive on this as well; in fact, if BOTH of you start yelling at the office of the prez, you sometimes get action faster.

And keep the wall handy.....
Web Reference:  http://www.myriamsHomes.com
0 votes
Phil Rotondo, Agent, Melbourne, FL
Sun May 22, 2011
Jmart;
Welcome to Short Sales.
Ryan's right......while you're waiting, hedge your bets and look for another.
Web Reference:  http://www.321property.com
0 votes
Ryan Smith, Agent, Murrieta, CA
Sun May 22, 2011
Unfortunately many people get the same run around. I wonder if the listing agent is following up weekly? Do you know who the seller's bank is? Some banks are worse than others. I would suggest you view some other homes just in case.

Good luck!
Web Reference:  http://www.ajsocal.com
0 votes
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