I have a short sale listing that we have gotten an offer on. The property is listed for $39,900 and the offer is close to asking price. The outstanding loan is $91,xxx. There has been 2 drive by BPOs done as well as a full appraisal. There is a $40K discrepancy in the BPO's which is why there was an appraisal done. The appraisal came in very close to our offer. this property has been abandoned, the pipes are frozen, and it is in poor condition. Here's the problem I am running into: Equator does some sort of AVM, which is coming in at $95K. The "supervisor" told me that it will continue to be denied until our offer is at least 80% or more of the loan amount. What is the point of ordering the BPO's or appraisals if they are going to disregard condition and price? The foreclosure is imminent, and they will spend more money and get less for the property if it goes that way. I am having a hard time finding someone that can free think. Any ideas on how to do this file, or just throw my hands up?
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You DO need to try and escalate it. If you can get past the $8.00 an hour people and get to an SVP, they CAN override it. The thing you need to keep in mind is this...what you think makes financial sense may not be accurate...there may be factors in play that you don't know about. Specifically there may be mortgage insurance on the loan which won't kick in until the lender actually forecloses. Think about it, it's INSURANCE. There are very specific rules as to when they pay out. They are not going to write a check just because the lender decides to accept a short payoff. They too have to believe that this is the most the property is going to sell for and they too have to approve the sale. That's part of the reason why the whole short sale process takes forever. You may have convinced your negotiator, but your negotiator may not be able to convince the MI company.
Actually you need to make a business case of this listing. How much $ you wish to get out of the deal for the effort and problems you are faced with? Put it bluntly what is your hourly fee? One agent called the bank routinely and found they changed the 800 number so it is a Withdrawn. I agree with Steve Askins suggestion.
What many people don't realize on these Short Sales is that the bank knows their bottom line number and if the bottom line number has to come in at least 80% or more of the loan amount......then that is the bank's way of telling you, either get it or we will foreclose, we will spend more money, we will get less for the property but, from our numbers....that is ok so, perform or get out of the way.
I completely agree with Steve here....why waste more time and energy?
The only other option I think of is, contacting the bank's regulatory department and filing a complaint but, that is just going to cause you to spend even more time and energy and I have to ask, is it worth it?
I wouldn't give up just yet... Sounds like you have already put in a lot of time and energy into this thing, so might as well do one more step. Escalate it! Write a letter explaining pretty much the same thing what you explain us here, pointing out the facts and numbers and proof to them you have a good offer (if you honestly believe it's a good offer). On Equator, you should be able to e-mail that letter directly to Negotiator, Supervisor, AVP and VP, or any other executive management positions. Those are the people that really care about numbers and should not be looking at what the computer says. It's worth trying. Good luck!
Michael Babbitt > Vitaliy MikshanskiyJanuary 28, 2010 at 9:11pm
The problem we have ran into with Bank of America and escalating it is that when you request an escalation they usually assign it a new negotiator and restart thier so called 30 day review clock that each phase is supposed to get. Which drags out the process even further.
Why waste all your time and engery if they are not going to be realistic? Go on to the next property or wait until it's relisted as a REO. Big banks do not work under the same logic we do. I work for one of the big 4 banks and I have had to just get use to it. They would rather loose $10,000 then spend $1,000. And we have to face it, banks do not want to do short sales. They will do everything possible to avoid it.
Replies
I completely agree with Steve here....why waste more time and energy?
The only other option I think of is, contacting the bank's regulatory department and filing a complaint but, that is just going to cause you to spend even more time and energy and I have to ask, is it worth it?