A Bank of America FHA Short Sale Disaster

This Bank of America short sale doesn’t compare to the Bank of America HAFA that had 25 HUDs. But we’ve had at least half that many HUDs requested already on this Bank of America FHA Short Sale. The negotiator can’t decide what he wants or needs. First it’s THIS, then it’s THAT, then it’s THIS OTHER THING and then he’s back to THIS again. I call it the HUD game. The Bank of America negotiators call it doing business in a normal fashion. It’s enough to make a Sacramento short sale agent watch FOX News. No, not really, nothing would make me that insane.

But I try to have empathy. It’s not easy being a Bank of America negotiator and being despised by so many. The clients can’t stand them and the agents aren’t faring much better. One of them accused my mild-mannered and extremely polite assistant of “bullying” when she asked why he refuses to do what he says he will do. It’s like the guy has suffered a total memory lapse, but I suspect his inability to perform is due to keeping incomplete notes. He will say one thing, and when we call him back he has no recollection of the conversation and says something else.

Unlike Alzheimer victims, the negotiators seem like they are coherent. However, on top of the poor record keeping and inconsistent behavior, is the sudden loss of files on those Bank of America FHA short sales. We have a Sacramento short sale that we started in February. By the end of March, we had approval from Citimortgage, the second lender, which changed its name a while back to One Main Financial. By the end of June, we finally received the Approval to Participate from HUD on this FHA short sale. I guess Bank of America fired the negotiator or maybe she died, hard to say, but she vanished one day. Poof. We got a new negotiator in the middle of September who informed us he had absolutely no paperwork whatsoever.

Maybe he picked up the file, glanced at it, and said: What is this garbage — and threw it into the recycling? Or, maybe the previous negotiator stuffed it in the shredder on her way out the door? I suppose it’s possible a Bank of America employee suffering from a combination of pica and low wages, driven by desperation and starvation, ate it?

This negotiator has asked us to add a dead person to the purchase contract and to all of the paperwork. The deceased person was never part of the contract. Her name was not recorded on the deed; it’s also not on the promissory note and not on the deed of trust. Somewhere along the line, in some ancient paperwork, a clerk at Bank of America typed the deceased person’s name on a file, on a piece of paper. In this negotiator’s infinite wisdom, that means putting a person who does not belong on title on all of the paperwork and on the HUD, which violates federal law (RESPA) as well as several local laws. Negotiators don’t have a real estate background. They don’t understand title insurance. They certainly don’t understand law, although I bet they dream of a career in law enforcement.

This is a $75,000 home in Sacramento. The person I feel tremendous empathy for is the seller. Next to that is the buyer who is sitting idle in escrow twiddling his thumbs. He is ready to close. His lender is ready to fund. The second lender forced the seller to pay $150 to get an extension that is good to next week. We told the second lender they cannot make the seller pay for anything in a short sale as a condition of short sale approval, according to California Civil Code 580e. One Main Financial did not care. It thumbed its nose at the seller and said: pay up or we won’t issue the extension.

Now, the negotiator at Bank of America is asking us to send him a letter from One Main Financial (the second lender) explaining how and why One Main Financial is servicing loans for Citimortgage. See, you can’t make up this stuff. As a Sacramento short sale agent, I see the most incredible crap go down at Bank of America. All one can do is send it to the Executive Office, write about it, and hope the the bank can eventually fix some of its problems.

Overall, Bank of America does a fairly good job with its short sales. But these FHA short sales leave this Sacramento short sale agent slack-jawed, shaking her head. I imagine this will close but not before we step over a few dead bodies. Forget the coffee, Bank of America could probably use some Viagra.