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Equator Starts the Day for a Sacramento Short Sale Agent
When it’s 5 AM in Sacramento, it’s 8 AM on the East Coast. I get a head start on my day by updating my Sacramento short sales before people start calling. However, I am finding it is increasingly difficult to write my blog uninterrupted on a Tuesday morning because all of the short sale negotiators in Equator are up and at ’em first thing. It’s like they don’t touch their computer all week or something. They wait until Tuesday. My inbox begins dinging with Equator emails at 5 AM. I could not imagine looking at a file only once a week, but that’s how some short sale negotiators seem to handle their workload.
Many short sale lenders are using Equator now for processing short sales. We’re all anxiously awaiting for JPMorgan Chase to join Equator but it doesn’t seem to be happening. I keep hearing rumors that Chase will be on Equator. First, it was last summer, then by this fall, and it’s just not a reality yet. But we do have the top 4, which are Bank of America, Wells Fargo, GMAC / Ally and Nationstar.
The thing with Equator — as I was explaining yesterday in my presentation to the ballroom of agents at Lyon Real Estate’s FRED (Fun Realtor Education Day) event — is it over communicates. It used to send agents emails containing specific messages and those messages were also kept in a property folder on Equator. Now, for some reason, Equator generates an email to tell a Sacramento short sale agent that there is an email in Equator. And when the agent gets to Equator, the email directs the agent to a task. Except the task is not really always a task. I prefer the old method because I knew what I was getting into before I got there. It’s not always worth it to open Equator. Sometimes, the messages are pointless.
Not only are some of the messages pointless, the messages can also be “system generated.” A system-generated message will say things like somebody is reviewing documents. But nobody is really reviewing documents. Yet, I am not about to complain about Equator. No sirree. I know what life was like for this Sacramento short sale agent before Equator, and I never want to go back there.
It’s bad enough that I have to work on Bank of America FHA short sales outside of Equator. I don’t wish that horrible experience on any short sale agent. I love Equator and an Equator short sale. I am Equator Platinum Certified, not only for short sales but also for REOs. I received certifications for both. I don’t handle REOs, but you never know, one day I might. I have belonged to Equator since its transformation from REOTrans. It’s a lifeline for Sacramento short sale agents.
Bank of America Cancels a Short Sale
This Sacramento short sale agent spotted a freaky warning in Equator yesterday about how Bank of America cancels a short sale. It’s a Cooperative Short Sale. My seller is receiving more than $10,000 to do this Sacramento short sale. It’s been smooth sailing for her from day one — no financials, no hardship letter — and the docs are in title, knock on wood. The warning was from Dignified Transition Solutions (DTS) and read: LOANS ARE MORE FREQUENTLY BEING SERVICES RELEASED FROM BANK OF AMERICA, WHICH WOULD VOID THE DEAL. This means exactly what you think it means. It means that even though we have short sale approval and are about to close escrow, Bank of America can cancel the short sale.
The buyer has completed all of her home inspections. She paid for a lot of inspections, too: roof, chimney, general home inspection, pest report. Yeah, yeah, I know what you’re thinking. You’re thinking so what, the buyer does not have a contract with Bank of America. The buyer has signed a purchase contract with the seller, and that purchase contract is contingent upon bank approval of the short sale — even though it is a preapproved Cooperative Short Sale, the bank still needs to approve the purchase offer.
Yet, you probably wonder how can Bank of America cancel a short sale? The bank is not the investor. This is the little known but all-important fact in most short sales. Often, the bank is only the servicer, it services the loan, collects the payments (or non-payments) and disburses the money on behalf of the investors. Investors are increasingly pulling that servicing from Bank of America.
I had another Bank of America Cooperative Short Sale yanked by the bank right after the Equator counter offer. Here, we were waiting for what we so innocently presumed would be the short sale approval letter when we were abruptly notified that Bank of America was no longer servicing the loan. It had been transferred to our buddy, Seterus. Which was once, believe it or not, IBM. What a sad graveyard for typewriters and a former technology giant. We started the short sale over from scratch with Seterus. No cash for this seller. No guarantee the short sale will be approved again, either.
Another Cooperative Short Sale at Bank of America is destined for another servicer as well. We went back to the bank negotiator to ask for a short sale extension and were informed the file was being held, pending a servicing release. At least the bank had the decency to hold this pending release but it’s also now being released. This investor is Fannie Mae. I don’t know who the other investors are in my other Cooperative Short Sales — just that those investors are not a government sponsored entity (GSE) like Fannie Mae. That information is unavailable. I do know that we have Fannie Mae saying: Adios, B of A. And don’t let the door hit you in the butt.
Still, the question is how can Bank of America cancel the short sale just before closing? Like with most things, the answer lurks in the legal documents. In the short sale approval letter, Bank of America says, “We may terminate this agreement at any time if we have evidence of: blah, blah and
“The transaction does not comply with our requirements, policies and procedures.”
If Bank of America is no longer the servicer, you’re hosed. So, the moral of this story is it ain’t over until the fat lady sings. Until you close escrow, that Cooperative Short Sale at Bank of America could be at risk.
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.
Criteria for a Sacramento Short Sale Client
I can astonish myself at the words that come out of my mouth. This agent doesn’t mince words. I say exactly what I mean, and I pride myself on communication. People say I can take the most complicated situation and break it down into simple words that make sense to others. It’s a gift, I suppose. Not everybody can do this. It’s probably why I was chosen to work for the New York Times and write about home buying on About.com on the side, but my primary job and focus is selling Sacramento real estate. As such, I work with people I don’t know, known as people from the public, from the subdivisions of Sacramento. They call me out of the blue.
I prefer to work with those who are referred to me because I know at least one other person has verified their sanity. Otherwise, it’s turning out this year to be a 50 / 50 proposition. I try to weed out the crazy people from my life. I know that’s terrible because they need help, too, especially those who might have to do a short sale. It’s not nice to discriminate, and I feel bad about not working with those people because it’s probably not their fault that they’re nuts. They could have been born with this defect. I mean, who are we to judge? Yet, we do judge. It’s human nature.
Not only that, but everyone of us is a little bit nuts. Especially by comparison to each other. I don’t think anybody is 100% sane. Not even me, although I probably believe I’m more rational than most. I possess a lot of common sense, and let me tell you, common sense will take you a long way particularly if you have enough common sense to wear comfortable shoes. When asked to pick my favorite sense among our 5 senses, I’ll take common sense for 1000, Alex.
I listened to a woman scream yesterday. On a Saturday, not even a week day. It’s my fault for answering the phone. She wasn’t my client. She was the girlfriend of an underwater seller who was trying to become my client. She believed that as a Sacramento short sale agent, I should represent her boyfriend to the bank exactly like a lawyer would represent him. She didn’t believe he should have to talk to the bank. There is a part in the Bank of America short sale process in which the borrower needs to call the bank. I am not a lawyer. As a Sacramento short sale agent, I cannot fill out a borrower’s paperwork, and I cannot make that customer survey phone call to the bank.
Finally, I had to say that what we have here is a failure to communicate. I don’t even like Cool Hand Luke. Now, I realize many people today are distressed. It’s difficult to figure out what to do with an upside down house. By the time a seller calls me, he or she is probably at the end of his or her rope, running out of options. I try to be sensitive to my clients’ situations and attentive to their needs. But my policy is I represent people I like and respect. This couple did not end up being one of those.
A Bank of America Short Sale Counter Offer
Before I talk about a Bank of America short sale counter offer, let’s address this Lady Gaga thing. I mention it only because if I received an engraved invitation, I would decline to attend an event to watch Lady Gaga in a bottle strip to her undies and get a tattoo. I would not go even if I was invited through a last-minute text message. Surely, there are better things to do, no? Like, take out the garbage before your house starts to stink or get a pedicure. But this Lady Gaga thing was a huge black-tie event attended by celebrities as a debut perfume launch. It hurts my eyes to even read about it.
But maybe that’s why I am a Sacramento short sale agent and not running around with the likes of Jason Wu, Paris Hilton or Lindsay Lohan. I have many more exciting things to do like talk to third-party vendors at Bank of America about counter offers. What is a Bank of America counter offer? Well, for starters, it is not exactly a counter offer, which confuses a lot of Sacramento sellers. I try not to use jargon when talking with my clients, but sometimes it slips out, and for that I am truly sorry. I am not sorry that I didn’t go to the Lady Gaga event.
A short sale counter offer is issued by Bank of America or a third-party vendor representing Bank of America through Equator. It is a formal response to all of the fees noted on the HUD and submitted to Equator by this Sacramento short sale agent. See, if the bank can reduce some of the fees, that will increase the bottom-line net to the bank. Plus, investor guidelines state acceptable and non-acceptable fees. Some of the fees often contested are miscellaneous title services such as doc prep, courier, notary and some don’t want to authorize payment for recording of the deed. Sometimes they reduce the escrow fee.
In Sacramento, it is customary for the seller to pay the escrow fee. But in other parts of the country and California, the escrow fee is often split 50 / 50 between seller and buyer. It is not unusual for the bank to place a maximum cap on the amount it will authorize. In many instances, that amount is $750.
There are also negotiators at the bank who do not read the net sheets we send them. They instead read the HUD, and the HUD is very confusing to many people. Ever since the RESPA change a few years ago, we’ve been fighting battles with bank negotiators who insist that credits to the buyer are not allowed — when the credits shown on the HUD are not really a credit to the buyer at all. Sound confusing? Imagine how the bank negotiators feel.
Yesterday I spotted a city transfer tax fee of almost $600 that the negotiator had removed from the HUD. When fees are removed, it means the buyer has to pay them. Because of SB 458, the seller cannot pay fees the bank refuses to authorize. So, I questioned the negotiator. I asked her why it was removed because it was a standard and customary fee paid by the seller in Sacramento. This fee is based on .275% of 1% of the sales price. It can amount to a lot of money, in this case: six hundred bucks.
Turns out the negotiator thought it was a buyer credit on the HUD. After I explained that there were no credits at all on the HUD, the negotiator put that number back into the list of authorized fees and approved it. I wonder if she would like a bottle of Lady Gaga’s new perfume?
Photo: used with permission bigstockphoto
