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A Bank of America HAFA Short Sale Broke the Record
It’s too bad this isn’t Talk Like a Pirate Day because I’d like to say shiver me timbers — I got a Bank of America HAFA short sale approved in fewer than 6 weeks. None of this year-long craziness with 25 HUDs. Start to finish, from the day Bank of America mailed out the paperwork to the day we received the short sale approval letter for the buyers of that Hollywood Park short sale. How did this happen? Did the Sacramento River open up and part? Did a lightning bolt slap the Sacramento Capitol? And more important, how can this Sacramento short sale agent make that happen again? Over and over?
Because I did the same things I always do. I reviewed all of the paperwork upfront for the short sale, which is an extremely important component some short sale agents miss. We discussed the hardship letter in detail. I immediately turned around the revised HUD and Terms of Sale. I wasted no time in uploading the short sale offer and responding to the counter in Equator. I did my job as usual, including selling that home in record time. So what was different this time that I didn’t want to poke out my eyes with a stick?
It wasn’t a true HAFA, now that I stop to think about it. Oh, yeah, the tenants are getting a check for $3,000, but the seller is also getting some money. The seller is getting more money than the tenants. I’m calling it a hybrid short sale — a combination HAFA short sale and HIN Incentive — which is like a Cooperative Short Sale but it’s not. That’s the best explanation. But not the only explanation.
The other part is the third-party vendor for Bank of America wasn’t one of my usual assignments. There’s an entire smorgasbord of acronym vendors who handle the HAFA and Cooperative Short Sales for Bank of America. Definitely was not one of those. It was Service Link. I’ve worked with Service Link in the past, and they are so responsive. It’s almost like they were raised on another planet.
The guys at Service Link are trained. They are professional. They know how to communicate. They do what they say they are going to do. In short, they must be German. They do their job efficiently. And they do it remarkably well, especially in comparison to those other guys.
I’m still slapping my face to wake up. Six weeks, start to finish, for a Bank of America HAFA short sale. I feel like admitting, yes, Virginia, there is a Santa Claus.
Bank of America is Pro Short Sale
Bank of America has a message for underwater homeowners in Sacramento, it appears. That message is: Bank of America wants to do your short sale. People have heard all of the horror stories about the many, many months it takes to do a Bank of America short sale, and that is not always the case. In fact, it’s rarely the case. This Sacramento short sale agent can initiate and close a Bank of America short sale, from start to finish, in about 45 days. Even without a hardship. Yup, Bank of America is granting strategic short sales and all kinds of other short sales just to get rid of those loans, for whatever reasons.
For example, you might ask when is a HAFA short sale not a HAFA short sale? Because sometimes homeowners don’t qualify for the HAFA. There is a new law that says the banks must explain what constitutes qualification for a HAFA because that’s been left up to each bank to decide, and often that method is a complete mystery. Well, far as I can see, it still is a mystery. We can do our best-guess-scenarios here in Sacramento, and I have few theories myself, but nothing in concrete as to the exact criteria used. So, in that regard, nobody can really figure out if the bank is handing out crap or what because the bank still writes its own rules.
In any case, a HAFA short sale is not a HAFA short sale when Bank of America says it has switched to a Cooperative Short Sale. We started out with a HAFA application for a home in Natomas, a neighborhood in Sacramento in which almost every home is a potential short sale if it hasn’t recently sold. Somewhere in the middle, Bank of America switched the short sale to a Cooperative. If you ask the bank, it will tell you that you need to initiate the Cooperative short sale before you have an offer, not after an offer has been presented to the bank. It will also tell you it doesn’t do Cooperatives in which there is a second loan. But they make exceptions. This home had a second loan. I have, in fact, done other Cooperative Short Sales in which there was more than one loan, and that second loan was not held by Bank of America.
There are exceptions to everything. The banks decide what they will except and which variances they will not grant. That’s the thing about short sales. They use the rules when it’s to their favor, and they ignore the rules when it’s to their favor.
So, if you think you know exactly which end is up and what you are doing, then you are most likely not a Sacramento short sale agent working on a Bank of America short sale.
This Bank of America short sale closed yesterday as a Cooperative Short Sale, paying the seller $2,500 and releasing both the first and second mortgages without liability.
How to Get $10 a Day for a B of A HAFA Short Sale
We just closed a Bank of America HAFA short sale yesterday that had started in January. This was my second Bank of America HAFA short sale closing this month. The one that closed last week was much worse by comparison. In this particular HAFA, I was fortunate to represent an extremely detail-oriented seller who had completed all of her paperwork immaculately and upon receipt. This escrow should have flowed just like clockwork, yet it took 10 months to close. Within 30 days of opening the file in Equator, we had approval from the second lender, Green Tree, and all documentation submitted and verified, including two completed BPOs. Still, it took 10 months.
By the time Bank of America gave us its first B of A HAFA short sale approval in May, the approval at Green Tree had expired. Despite our pleas, Green Tree closed the file. We reopened the file at Green Tree and started over. There were the usual battles at Green Tree: calling the seller at work, harassing the seller for payment, threats of short sale charge off, and finally we said: fine, send the file to charge off. See, this is the thing — Green Tree can reopen and re-approve a file in 2 to 3 weeks, what it takes Bank of America 3 to 4 months to do.
To add to the horrors, Bank of America then abruptly closed the file early July. It was a mistake. We had asked for an extension but no, they closed the file. We tried to reverse the soft decline, Tweeted the Social Media Team, escalated the file to the Executive Office, but to no avail. Of course, by this time, Green Tree approved the short sale a second time, while we started the process over with Bank of America.
Bank of America assigned an escalation specialist to the file. This negotiator managed to get approval two months later, insisting her performance was perfectly satisfactory. You’re telling me that a HAFA initiated in January and closing in October is perfectly satisfactory? This is why many sellers would rather poke out their eyeballs than do a Bank of America HAFA short sale. The only benefit to a seller is that $3,000 payment. Which worked out to a return of $10 a day.
I reflect on this and wonder what we could have possibly done differently. The answer I come up with is not to have applied for a B of A HAFA short sale at Bank of America. But when a seller insists on a HAFA, that’s what I do. It’s not my decision to make. This particular seller figured she had 10 months to wait, so it didn’t matter. As long as she closed by the end of the year, she was satisfied, but I wouldn’t go so far as to say she was happy about it.
The other element in this transaction was the buyer. The extremely patient, dedicated and committed buyer. We selected the right buyer, which is always key to a successful closing. It could have been much, much worse. I could have had to sell this Elk Grove short sale three times instead of only once.
As an experienced Sacramento short sale agent, I have been closing Bank of America HAFA short sales for a long time. I am Equator Platinum Certified and a Certified HAFA Specialist. If you absolutely want to do a HAFA short sale through Bank of America, I doubt there is much I haven’t seen, and I’ll be happy to help you close it. Just be forewarned.
25 HUDs to Close a Bank of America HAFA Short Sale
I will forever recall this short sale as the deal that demanded 25 HUDs to close a Bank of America HAFA short sale. I am only half joking with clients when they ask me about a Bank of America HAFA short sale. I say: “You would rather poke out your eyes.” Like with any short sale, there is truth in the pain. The pain, I tell sellers, is simply an accurate description of the agony that other Bank of America HAFA short sale sellers have shared with me, which I freely pass along to them. I don’t discourage a HAFA short sale for these Bank of America customers, but I want to prepare them for what lies ahead. As a Sacramento short sale agent — I share my experiences, good or bad — full strength, I don’t dilute.
We closed a Bank of America HAFA short sale yesterday that started in August of 2011. We were bright-eyed and bushy tailed back then. Our HAFA package was completed on that warm August day when we initially signed the listing paperwork. We started the transaction with UTLS, which later changed to AMO, which was then transferred to AMS, and I’m not sure who we were talking to when it closed, but it might have been REDC. I lost track. It was no longer important to count the third-party vendors as it was to the count the number of HUDs we supplied to them.
I tweeted the Bank of America social media team. I contacted the Executive Office. We escalated the file. It did not stop the demand for a revised HUD — eventually 25 HUDs in all. First they wanted THIS on the HUD. Then they demanded THAT. We gave them THIS and THAT but they wanted THIS NEW THING. After they got THIS NEW THING, they wanted THIS again. We supplied THIS and they asked for WHATEVER. We gave them WHATEVER and they went back to THIS and THAT.
I’m not making this up. That’s the hilarious thing about a Bank of America HAFA short sale — you don’t have to make up anything to induce tears from your shrieks of laughter. You start to wonder if the bank is just messing with you or if it is really that inept. A client told me yesterday it’s definitely ineptness after I relayed this story. He showed me a letter he received from Bank of America. It said his loan was paid in full. It was an explanation of why the bank returned his August payment. Because his loan was paid in full. Except his loan is in default, and we’re about to open a short sale file. Needless to say, his short sale will not be a Bank of America HAFA short sale.
But the 25 HUD short sale that closed yesterday was not my longest Bank of America HAFA short sale. This lasted a short 14 months. Of course, when we finally received the short sale approval letter, the buyer who had patiently waited all of this time decided to cancel. That is not completely unexpected. We put the home back on the market and immediately received a ton of offers — some as much as $20,000 over the original buyer’s offer. I asked the buyer’s agent: Is the buyer dumber than a bag of nails?
The 28th of September came and went. Our short sale approval letter expired. Finally, the original buyer came to his senses and elected to close escrow. We received an extension, submitted at least 3 final HUDs and closed on October 5th. Which was good because Monday is a holiday and the auction is scheduled for Tuesday. The seller is very relieved that this short sale rollercoaster ride is over, bruised, but no broken bones.
The Short Sale Law of Averages
I think the law of averages says that for every three good things that happen, something else awful will happen. So, no matter what, I’m always ahead, right? Like receiving 3 short sale approval letters on a Monday (of all days) for 3 Sacramento short sales leaves room for something else to explode. I didn’t know if I would be able to pull two of those short sales out the fire. We had a huge disagreement between the second lenders and the first lenders. It was the usual disagreement: The first lender wanted to pay less and the second lender wanted more.
But in the end, they met in the middle. There was a bit of compromise. Negotiating a short sale is not always about power plays. It’s about give and take and options. It’s about having a Plan B and a Plan C. It’s about about patience and not letting personal feelings about anything enter the equation. Mr. Spock would have made a good short sale negotiator. James T. Kirk, not so much.
In the second short sale, it had been a long battle between two lenders as well. The bank originally wanted to give the seller many, many thousands of dollars. But the second lender refused to approve that scenario, and that was understandable. I don’t know if it’s because we wore them out with our incredible staying power or because of our luck that HAFA regulations had changed in June so we could give the second more money, but we finally brought both parties to an agreement.
Just as we’re patting ourselves on the back for a job well done, a short sale set to close this week blew up. All of a sudden the buyer backed out. Oh, he gave some lame excuse like they all do when they cancel but bottom line is he bolted. After 11 months of waiting for HAFA short sale approval from Bank of America. That makes little sense. We were so close to closing. This is like crawling across the desert without water to find a mirage.
See, agents often ask why I ask so many questions, why I insist on commitment, and this is why. Because we want buyers to close the short sale after we obtain short sale approval.
