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.