Fannie Mae short sales: Making things harder than they should

So the good news is we just closed a short sale listing from Queen Creek at the beginning of the week. More good news is this short sale was not a cat because if it only had nine lives, it would be dead.

We took the listing in May of 2010 and by the time we got an offer that would stick it was mid-July. The BPO came back at $131,000, right about where we thought it should be. Even thought he buyer had only waited for less than five weeks, they had found another house so back to the market the house went. The problem we were facing with this area of Queen Creek is it was probably the most rapidly declining area of the East Valley.

We got another offer in October, and because this is a Fannie Mae short sale the original BPO should have been still valid and with an offer of $120,000 we knew we would have to work some magic to make this happen or challenge the BPO. But for some reason, they ordered a new BPO, and in this rapidly declining market the number came in at $152k. 152k? Someone used some bad comparables. I usually meet the BPO agent at the property as I did this time, but this BPO agent would not allow me to even talk to him, so there was nothing we could do to make sure he was looking at the same info I was.

The buyer was not willing to work with us as we fought it, so they walked too and back to the market we went.

The first week of January I get an offer for $117k, which was about market value, and they were willing to wait while we challenged Fannie’s BPO.

Of course Fannie would not make it easy and just look at the comparables we were providing and see the obvious. They refused to look at value. We escalated in Bank of America to try to get them to help us fight Fannie Mae. Again we were told no Fannie would not take a look at value.

After we were told at least 5-6 times by a variety of people that Fannie was refusing to even look at value, we eventually found someone in the escalations department who realized we were right. How could values go up 20% in four months? If the comparables sold in the last three months were 95k-130k, with only one above 117k, how could ours be worth 152k?

But again even though she was working on making the case to Fannie Mae, they would not look at it. Finally as a last ditch effort I started calling every manager and executive at Fannie I could get a number for, and they all refused to talk to me saying I needed to go through the servicer. Then I blasted them all with emails outlining my case. I was so aggressive in my contacting that Fannie Mae called my escalations contact at Bank of American and yelled at her telling her I had to stop contacting them. That meant I was doing my job.

Eventually all my harassing of Fannie Mae paid off and they agreed to do a new BPO, which came back at $122k, right where we thought it should. So we wasted hundreds of man hours and two months of time, but we were making progress. Of course there were issues with cash contributions and promissory notes that I will discuss tomorrow, but we would eventually get an approval letter and they gave us only 5 days to close. Of course they had to make that difficult to and it took two days on the phone to get them to eventually extend it two days AFTER the letter expired.

Fannie Mae needs to find a better way to work with agents and/or servicers. Eventually they would agree with everything I say, but they took months and hours of time to get there. If they had been able to use their brain, it could have saved a lot of time and money.

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Bad short sale counter offers are not always banks fault

As an agent doing short sales in Chandler and the surrounding area, sometimes I will get a counter offer from the lender that will make me wonder exactly what they were smoking.

Yesterday I had a Bank of America deal that did just that. We had received approval on a short sale in August at $131,000. By early September we lost the buyer. So back on the market the house went. The issue we were facing was a rapidly declining market in this area.

We put the house back on the market and in about a four weeks we received an offer at $125,000. We submitted the offer to the Bank of America short sale department and in just three weeks they ordered the new BPO to determine current value, assign it to a negotiator and send us a counter offer. But that is where the issues started. The counter offer was for $157k. What? 157k??

I pulled up comparable properties in the subdivision and I cannot find anything in the last three months that has sold for more than the $125k we had the offer in for. Then I found it, this one house that sold for $254k!

Now why did this house sell for so much? Maybe it was because it was 1200 square feet bigger than our listing? Maybe it was because of all the upgrades throughout the house that our listing did not have? Maybe it was because this house was a show house for the developer, a model home that had never been lived in. Most likely it was because of all the above.

As you can see this house is not comparable to our house at all. Does Bank of America know this? No, they only see the BPO that the agent submitted. They can only make decisions based on the information they have and now that I have provided them with all the information maybe we can get this approved quickly.

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Bank of America short sales: Halting foreclosures for now

Bank of America has announced they are halting foreclosures in all 50 states… for now. Don’t expect this to last to long and if your short sale is facing foreclosure soon make sure you are working the deal because as soon as these are released it could be foreclosed on at any time.

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Bank of America short sales policy needs to be changed

Bank of America short sales policy towards conventional loans needs to be changed. When they will reject a conventional loan offer that nets them the same as a FHA offer they will accept, that is a problem. If a conventional and a FHA offer net them the same amount they should give them the same consideration.

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Bank of America short sale resolved quickly by not hearing no

This Bank of America short sale problem was resolved because when they said no, we heard KNOW. Many people hate short sales because they say no to often and many people hate Bank of America because they are slow to respond. When you get the two issues together it could create a problem.

Many times when banks say no the agent negotiating should be hearing KNOW not NO. When you have that mindset it becomes a problem to solve. What do they not KNOW that will make them change their mind.

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I actually enjoy Bank of America short sales

People love to rip Bank of America short sale department as being the worst. I myself have done some videos on the subject saying the same. But the truth is they are now probably the most improved. I recently talked to a lady looking to short sale her Tempe house and she was shocked when I said I was looking forward to Bank of America deals.

Now every deal is different, but their times have been greatly improving. Just this last week I got approval on a deal in only 22 days. Bank of America deserves praise for what they have done to improve things and let’s hope they keep it up.

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Top 10 real estate posts of the day for 3/22/2010

Here is today’s list of top real estate posts of the day.

1) How screwed up is Bank of America? – The stories on the banks messing up on these foreclosures seem to be never stopping. Here is another one where the bank decided to foreclose on a house and take the goods inside. Even though they were not the lien holder on the house.

2) Will Getting A Loan Modification Hurt Your Credit Score? – Foreclosures and short sales are not the only thing that can damage your credit. Loan mods could have a negative impact too.

3) Use your Business Cards Effectively: Direct People! – There is somewhat of a point to what he is saying, but that is easy to say for me and Josh Aberson, but if your name is Ruth Griffith or John Smith, it is a little harder. And I also want to make sure they know I am easily found on social media so I list all my social media platforms on the back. And if they are driving down the road and want to see a house, I want them to pull out my card and call me, not the agent on the sign so I make it easy. But I get his point.

4) The Lowest Mortgage Rates of 2010 Will Be Locked In March And April – Mortgage rates have to go up they cannot go any lower, we have been hearing it for a solid year now. Dan Green thinks there may be about another month and a half left.

5) Foreclosure Inventory Is Increasing – With numbers going up will banks slow down again on the number of foreclosures they do to keep inventory lower?

6) The Advantages of Presenting and Receiving Offers In Person – It is harder and harder to do these days with the amount of foreclosures, but that is a local thing.

7) What Will You do for Success in Real Estate? – Choosing between work and down time is always a difficult choice. I like John tend to pick work right now.

8) Are You B. F. D. or Delusional? Take The Scrape The Label Test. – This is one of those posts you need to read 2-3 times to digest it, but you should!

9) 10 Commandments when preparing to apply for a mortgage. – Short and to the point, more people should listen to number 10.

10) Have you heard the one about the lawyer & the shark? – Lawyers and Realtors, she is right, we have so much in common. Both not held in the highest of regards, until you need us.

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Top 10 real estate posts of the day for 2/23/2010

1) A pulse, a passing grade and a business card: raising the bar on real estate agent qualifications – What will the brokerage of the future look like? Will more formal education be required, will more real estate class hours be required? It is hard to imagine this will be the model for a business where the agent needs to pay the brokerage every month to be associated with it.

2) IRS Clarifies What’s Needed to Claim Tax Credit – If you are applying for the tax credit do you now what you need to submit to get the credit?

3) Bank of America forecloses on house that couple had paid cash for – I have a question for Bank of America. Why does it seem that almost every time there is a nightmare story about a bank having to do with a botched foreclosure and/or short sale the bank involved tends to be BoA? This is at least the third one of these I have read about, good to see the owners fighting back.

4) Breakout Session Highlight: Short Sale Offers and Contracts That Win – Part of a session from the Keller Williams Family Reunion #KWFR. We often read about how to deal with short sales, but how about dealing with buyers who may be interested in a short sale?

5) The Offer: There’s More to It Than Price – What if your offer on a house was the highest and was not accepted? It happens. There is a lot more than the offer price to determine the best offer.

6) $8,000 (or $6,500) Home Buyer Tax Credit – Lobbyists on the move for ANOTHER extension – I did at least a couple videos last fall before the tax credit was extended saying “don’t do it.” But they did. Now they are talking about doing it again and don’t be surprised if they do extend it one more time, after all, it is an election year.

7) Missing the Forest for the Trees: the RPR License – Rob Hahn takes a close look at the RPR license. You have to give RPR credit, they are making the process completely open and transparent.

8) Why is My Insurance Premium Different from My Neighbors? – A look at some of the factors that can effect your homeowners insurance premium.

9) Mortgage Rates Change Faster Than Freddie Mac Can Report It – We have covered it dozens of times, why you cannot shop for mortgage rates online.

10) Ohio Man Sends Bank a Message Via a Bulldozed Home – You have probably seen the video by now, but just in case you have not… That is going to be an expensive mistake.

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Short sale agent has problems getting approval letter from Bank of America

Video 91: I received an email this morning from an agent this morning with a short sale listing with Bank of America, they had received a verbal acceptance, but not a written letter. When you go three weeks with a verbal, but not written acceptance it is time to escalate that short sale. Find out who the manager is, and their manager and let them know the troubles you are having. Would love to hear your thoughts, you can leave a comment or e-mail me Dean Ouellette.

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Top 10 real estate posts of the day for 2/11/2010

Here is today’s list of top real estate posts of the day.

1) Why we don’t need more professionalism among REALTORS – It is time to RTB, raise the bar. We have heard that over and over during the last month from real estate agents. Daniel Rothamel says let’s not worry about it.

2) #RETT Opens its Doors to Anyone & Everyone – What the heck is all this #RETT talk on Twitter over the last 48-hours. Well here is a good explanation of how the Real Estate Tech Tank started.

3) Simi Valley Home Buyers 3 Important Concerns with Short Sale Offers – If you are a buyer looking at possibly purchasing a short sale there are a list of things you should really know, Ted Mackel does a good job here of taking the concerns and making a top 3 list.

4) Finding Customers in the Palm of your Hand – “The mobile web is the flyer box for the 21st century” I love that line.

5) Bank of America Achieves Surrealistic Central Status – Bank of America is not the brightest group when it comes to short sales, that is not a shock. The reason this post is so valuable is there are two hidden lessons on short sales. First when you do not get the results that you should be getting, escalate to management levels who are much more educated and understand the process and they will get things that make sense done. Second it costs $3800 just the first day after a bank forecloses on a house, then come repairs, carrying costs and more… that is why it makes sense for banks to do short sales vs foreclosures.

6) Feb. 10, 2010 – Industry News Sites Announce National MLS – This shows you how long the national MLS has been coming. What no one has been able to really express to me is why as a licensed Arizona real estate agent I need to know what is on the market in Harrisburg, PA. It is a little outside my realm of expertise.

7) Controlling Your Real Estate Deals and Handling Catastrophes – This is a great lesson I learned the hard way in the last two months on a couple of deals that were having issues. You need to control your deals at all times.

8) Secret Squirrel and the Redfin Home-buying Class – Great marketing idea for home buyers and sellers that I see now and then, but could be done more for sure.

9) Rewards to Stop Mortgage Walkaways? – Idea has some merit, but it really depends on where the program is run. I could see it working in Iowa or NH where you may not be that far under, but somewhere like Las Vegas, Phoenix or Southern California where you may be $300,000 underwater $10k is not going to make much of a difference.

10) Are Banks Discriminating Against VA Homebuyers? – We all know banks are favoring conventional loans to FHA and VA, this post just highlights the point how we should maybe give a little better consideration to VA offers.

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