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A Sneaky Way for Fannie Mae to Reject Short Sales
Fannie Mae and Bank of America can be a difficult combination in a Sacramento short sale. Not insurmountable by any stretch but still difficult. Part of this stems from the guidelines overhaul last fall, I suspect, in addition to the fact that Fannie Mae has been releasing Bank of America from servicing. But much of the struggles short sale agents face with Fannie Mae short sales probably have a lot to do with the fact that Fannie Mae, under the direction of the FHFA, has been moving away from short sales all together. There is a lot of speculation in the short sale community as to why.
It’s kind of a joke that Fannie Mae has set up a place where short sale agents can escalate or contest a price valuation. It’s just a website and a process to make an agent feel like Fannie Mae is doing something positive when it’s not. Just a way to shut up an agent. It’s sort of a smoke screen, I imagine. Because I knew a value was wrong, and I asked Fannie Mae to review it. Not only did the BPO agent call me upon completion of the BPO, but she told me the value. Fannie Mae again insisted on a much higher value — even with the evidence of the true value put before its very eyes. The BPO means nothing. The review process is worthless.
It doesn’t matter what the value is to Fannie Mae, if it doesn’t want to do the short sale it will set a value too high. And the value will stay there until the moon turns blue or the market finally turns around. That’s Fannie Mae and our government for ya.
I’ve got another short sale in which Fannie Mae is insisting we produce corporate documents for a buyer who is not a corporation. It doesn’t seem to matter how many times we ask them to read our lips, the buyer is not a corporation, the buyer is a general partnership, Fannie Mae has continued to demand corporate documents such as Articles of Incorporation. When we finally passed that hurdle, the representative from REDC asked for POF in the partnership name. It seemed fastest for the buyer to deposit all of the funds, including the balance of the sales price and all of the closing costs, into escrow.
The buyer deposited all funds into escrow and we presented Fannie Mae with the receipt. Not good enough, says REDC. The buyer must now remove all of the money from escrow, put it back into the bank and produce a bank statement. I’m not kidding. I wish I could make up this crazy crap — but then I wouldn’t be a Sacramento short sale agent, I’d be some insane person in a mental hospital.
Will both of these Fannie Mae short sales close? Yes, most likely. And that’s why I’m a successful Sacramento short sale agent. I hang in there for the long haul and don’t give up.
Types of Bank of America Short Sales
This Sacramento short sale agent closed a bunch more Bank of America short sales at year end. I seem to close more Bank of America short sales than any other kind of short sale in Sacramento, although I doubt there is a bank out there that I haven’t dealt with. It’s just that Bank of America seems to dominate. So, that means I am very familiar with Bank of America. Here are some of the variations of Bank of America short sales a short sale agent can do:
- Bank of America HAFA short sales
- The Bank of America Cooperative Short Sales
- The Bank of America Streamlined Cooperative (which are different than regular Cooperative)
- A Bank of America Fannie Mae short sale
- A Bank of America Freddie Mac short sale
- A Bank of America FHA short sale
- A Bank of America VA short sale
- A Bank of America Fannie Mae HAFA short sale
- A Bank of America Freddie Mac HAFA short sale
- A Bank of America Fannie Mae Cooperative Short Sale
- You will not be able to do a Bank of America Freddie Mac Cooperative Short Sale because Freddie Mac does not participate in the Cooperative Short Sale Series . . .
And this is just to name a few combinations.
But a few days ago, a negotiator threatened to return funds. That happens sometimes. Not that funds are actually returned, just that the bank threatens to return the wire, which means it won’t accept the final payoff and the short sale is not really closed even though the documents have recorded.
Why? Why would a bank do that? In this case, the closer suddenly noticed that a second borrower did not sign the deed to the new buyer. This was not an escrow mistake. This was done on purpose. The reason the borrower did not sign the deed is because the second borrower was no longer “on title,” meaning the borrower had conveyed her interest via a deed to the first borrower. The closer claimed legal things such as the recorded deed and the title insurance policy vesting did not matter and that the second borrower absolutely should have signed the deed out and be noted on the HUD. RESPA be damned, was the attitude.
See, this is yet another reason why banks do not belong in the real estate business. Not to mention, how did a file get all the way through the short sale process at Bank of America if this was an issue? It’s because it’s not really an issue.
Photo: Elizabeth Weintraub, tropical fish in lagoon at Bora Bora
Selling Sacramento Short Sales in December
I will see you four Bank of America short sales and raise you one Wells Fargo short sale. Selling Sacramento short sales is like playing poker and winning all of the time. So far this December I have closed 5 short sales in Sacramento, six if you count an intense client whom I referred to a Sacramento short sale agent better suited to handle the more colorful characters. Before the month ends, another 6 of my short sales will close, bringing my total for the month to seven Bank of America short sales, three Wells Fargo short sales and an SLS short sale. That’s not a bad December for December being a relatively slow month, even without a partridge in a pear tree.
Most people who do a short sale can choose when to list their home as a short sale. Since there are historically fewer numbers of people who are willing to cross the desert barefoot and without water to do a short sale, it’s better to put a home like that on the market when there are larger numbers of buyers available. There will be larger numbers of buyers in January than in December.
Yes, I realize there is no inventory in Sacramento. As such, I am careful to keep my fingers out of its hot oil when I gingerly drop a home for sale into it and step away from the stove. After it’s a golden color, I scoop it up and let it cool on paper towels. If it’s not cooked all the way through, I cook it longer on one side, even if it’s a little browner, because people only see the golden side when they eat it. I’m pretty darned organized.
I’ve got my real estate predictions for 2013 completed. I expect to list a lot of homes in Sacramento this coming January and February. Probably not enough homes to meet the pent-up demand. Interest rates are extremely attractive, under 4%, and the government announced it intends to keep rates low until unemployment dips to 6.5%, which will be a very long time. But when it comes to a short sale, people can decide the best time to list a home, and that time is not around the holidays. Selling during the holidays is not really necessary for most people. Which means this Sacramento short sale agent can take a vacation. Yowsa!
Don’t think I am going hogwild off the beaten path, though, I am bringing my laptop.
Let’s Talk Like a Pirate About Sacramento Short Sales
What do you say to a biker whose motorcycle is blocking your car? Probably the same thing you’d say to a short sale negotiator, but then I’m not Myrl Jeffcoat. And Myrl Jeffcoat would most likely not be talking to a short sale negotiator regardless of how great of a Sacramento REALTOR Mryl might be because Myrl doesn’t particularly want to do short sales. Myrl is not a Sacramento short sale agent like insane REALTOR Elizabeth Weintraub, but that doesn’t mean she can’t appreciate the horror stories.
Since it was International Talk Like a Pirate Day yesterday, Myrl and I went to lunch in Land Park to celebrate. We parked in front of The Golden1 over on Broadway. The security guard made me re-park my car more efficiently because it was his job to stand in front of The Golden1 to ensure that there are at least 3 parking spaces at all times in front of The Golden1. I suppose he’s also there to shoot the little old ladies from Target who might try to rob the credit union. I hear that bank robberies by women are on the rise, and I’ve got to say you’ve come a long way, baby. Or, maybe men just want things done more efficiently. Hard to say. I’m not gonna argue with a security guard who gives me a free parking spot in front of The Golden1. I deal with short sale negotiators day in and day out, and you just give them what they want. You don’t argue.
Although, yesterday, a negotiator at AMS called; she was a bit flustered. AMS is a third-party vendor for Bank of America, which is my favorite, favorite, short sale bank. Oh, say what you will about B of A, maybe it’s simply the devil I know, but I love doing Bank of America short sales. This negotiator had asked previously for the seller agency. It had not been uploaded to Equator because there was no task for it. She had opened tasks for 2 other things but not the seller agency.
I thought this for a minute, and it dawned on me that this negotiator most likely had no idea what a seller agency was, so why did she want it? I asked her. She wanted it because the buyer’s agent had sent an extra copy with the offer, and the extra copy was not signed. Her job is to get signatures. I took the time to explain agency disclosures. How they work. Why we sign them. And asked if the seller had signed agency disclosure on a document with the buyer and the buyer’s agent. Yup, they had. So we were good, and she did not need another document. Once the negotiator understood this, she withdrew her request. This short sale was submitted for approval.
On the other hand, after lunch at The China Buffet, Myrl and I started to walk back toward my car. Myrl stopped at the bar, adjacent to The China Buffet. She stuck her head in the open door and announced that the owner of a motorcycle was blocking a vehicle in the parking lot. She demanded they remove it. At first, I wondered why Myrl cared about somebody else’s car. It seemed like she was about to provoke a biker who was drinking at noon inside a bar. Myrl is a lot smarter than that. I looked again at the vehicle. It was a Mercedes. I used to drive a Mercedes but I bought a new car last year; although German, it is not a Mercedes.
Oh, wait.
Well, I pondered the situation and decided I did not know Myrl. Nope, I believe this woman is a complete stranger to me, and I would keep right on walking. Yes, I believe I will walk across the street and stand on the sidewalk to see how this plays out. You know, she watched me park in front of The Golden1. She watched me walk back to my car and move it to a spot that made the security guard very happy. And now she was yelling at a biker in a bar. Perhaps she should talk like a pirate about Sacramento short sales and that will get her out of that bar alive.
This is one of the reasons I really enjoy hanging out with Myrl Jeffcoat. There is never a dull moment. Unlike this other short sale with Bank of America. It’s an FHA short sale, so it’s not in Equator and is a whole other animal. We’ve been working on it since February. Let’s just say the HUD procedures at B of A are a tad flawed but they can’t be the king of all short sales. I’m grateful for the traditional and the Cooperative Short Sales. The FHA short sales are the price to pay for those. It’s a tradeoff.
Our negotiator at Bank of America promised after all of these months she would approve the short sale on Wednesday. Said as soon as we got her the extension from Citimortgage (there is a second loan who approved months ago), she would issue the approval. We were so excited. We emailed her to remind her of her promise to send the approval letter. In exchange, we received this email (I kid you not):
I will be out of the office starting 09/19/12 for an undetermined amount of time. If you have any questions or concerns, please contact New Negotiator assigned to the file. Customer Service phone # 866.880.1232.
I can see that it’s time to Tweet the Bank of America Social Media Team. Arrr, me mateys and drunken sailors. Yes, let’s talk like a pirate about Sacramento short sales.
