Auditing a Bank of America FHA Short Sale

If you think a Bank of America FHA short sale is a nightmarish experience, consider auditing the file. Bank of America negotiators who work with FHA loans slated for short sale routinely audit those HUD files before submitting the file to Quality Assurance. This is where the file gets held up or set aside to rot in a pile of forgotten paperwork. Because I am betting that 9 times out of 10 those files are incomplete or wrong. This is not necessarily the fault of the negotiator at Bank of America as much as it is the fault of the Sacramento short sale agent.

I know you didn’t think I would say that. But I see the offers that come in on my Sacramento short sales, so I know the mistakes that are made. Logic has it that if there are that many mistakes in a purchase offer, imagine some of those negotiations. Agents are not known, to be kind about it, for their paperwork skills.

You might say but wait, Elizabeth Weintraub, you are a Sacramento short sale agent. Are YOU known for your paperwork skills? Actually, I am. Because once upon a time in a faraway land I was a Certified Escrow Officer. Those skills are very helpful to me in processing and negotiating Sacramento short sales.

So, this morning, I audited a file on behalf of Bank of America. I am not waiting for the negotiator to tell me what is missing. I have closed so many FHA short sales that I know what’s required and could probably recite it in my sleep. There are clauses that must be contained in the purchase contract. The address must be spelled out on every single document and complete. All parties need to be in contract with no expirations regarding terms or conditions. Those are just the simple things. There are also more complicated things.

I am presently working on a file in which the deceased mother of the seller was once noted by mistake on a promissory note. No doubt caused by a loan processor somewhere and not caught by an escrow officer. The mother was not on the mortgage. She was never on the title. She had no interest in this property, but a paperwork nightmare was created when her name showed up typed on a promissory note. The problem that is caused is the bank can’t issue approval without the execution of documents by a person who is no longer on the face of this earth. Bank of America wants the deceased’s name on the documents and the deceased to sign off. Unfortunately, the HUD cannot reflect a person’s name who is not on title. See the dilemma?

But this why you can rely on a Sacramento short sale agent who was once an escrow officer. I drew an addendum to fix the mistakes made by the negotiator from Bank of America and submitted the addendum for signature this morning. I’m not waiting for the negotiator to discover his own mistakes. And that’s what makes the difference between a Sacramento short sale that closes and a short sale that falls into the abyss.