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There Are Enough Crooks in Sacramento Short Sales
We have enough crooks in Sacramento short sales that we, ourselves, don’t need to add to the mix, whether we are a seller, a buyer or a real estate agent. I tell my short sale sellers that they need to keep their noses clean. Don’t do anything that the lender can later construe to be mortgage fraud. Because if a seller is dishonest, the bank can reverse the release of liability for that short sale and pursue a seller for the remaining balance, which is the whole reason to do a short sale in the first place. To get that release of liability.
I realize that sellers are upset with their banks, and they hate the fact they’ve been strung along for years paying on rotten loans that they can’t afford but that is no reason not to level with the bank during a short sale. Sellers also tend to worry that if they don’t make up some facts to color their financial situation the bank won’t approve the short sale. What they don’t realize is the banks typically prefer a short sale to a loan modification.
If you’ve been in the middle of a loan modification or attempting to obtain a loan modification and been turned down, you’re probably a prime candidate for a short sale. Especially if your bank is one of those institutions established for the sole purpose of picking up worthless mortgages. The bank might expect you to short sale.
Sometimes sellers want to say, for example, that they live in the property so they can apply for a $3,000 relocation incentive. If they don’t live in the property but instead live elsewhere, that could be mortgage fraud if they lie about it. Collecting $3,000 under false pretenses could cause a bank to withdraw the release of liability on that short sale after it closes. The bank could also demand the return of the $3,000, and then prosecute the perpetrator for a million dollars-plus. Mortgage fraud is a federal crime.
California Civil Code 580e (effective 2011) gave sellers the protection and the release of liability in a short sale, but it also takes it away if the seller commits mortgage fraud. If you’re contemplating such an act, you might want to ask yourself if the consequences are worth the risk. It’s not a harmless act of omission. The bank will track your credit card purchases, examine where your credit card statements are delivered and check to see if cable TV is still in your name. Don’t move in furniture because the BPO agent will open the refrigerator and check to see if the washer and dryer are connected.
You either live in the property or you don’t. Don’t mess around.
Another Amazing Bank of America Cooperative Short Sale
I closed another Bank of America cooperative short sale yesterday, this time in West Sacramento. The entire short sale was processed as smooth as silk. Our on market date to closing was fewer than 60 days, start to finish. This is because I prequalify my sellers whom I believe will be a good candidate for the Cooperative Short Sale. By the time we go on the market, we have the agreement in place to do a Cooperative and we have the preapproved price from Bank of America. Which in this case, was about $50,000 less than I anticipated.
There doesn’t seem to be a lot of rhyme nor reason to the valuations we receive from Bank of America. Most of the time, they are right on the nose, but sometimes the prices are too high and, every so often, they are a little too low. Even when they are low, though, it sets the stage for multiple offers, and multiple offers can push up that price.
When I sat at the dining room table with the sellers, I could see the little clouds of doubt lingering in their eyes. They were sharing with me their net worth and retirement plans, and I was explaining how Bank of America will most likely not request any financials, no tax returns, no bank statements; not even a hardship letter. It was clear that saying this was akin to telling them the Easter Bunny would hop into their yard in the early morning hours to hide Easter eggs. They nodded and looked thoughtful, but they had reservations, as any normal person would.
We went on the market, received several offers, and were in contract a few days later. The buyers absolutely loved the home. When Bank of America asked the sellers to submit a 4506T, that was the other shoe they had probably been waiting for to drop. But the 4506T was just a form, and whether the bank requested tax returns or didn’t, it had no bearing on the short sale.
The nicest part about the short sale is the fact the buyers gave the sellers permission to move at leisure, so there was no big rush at closing to get out. The sellers were able to stay current on their mortgage payments and were released from liability, plus the bank paid them a relocation incentive on top of an HIN incentive. Everybody got what they wanted, which makes for a very happy ending!
If you’re wondering whether you might qualify for a Cooperative Short Sale through Bank of America, call your Sacramento short sale agent, Elizabeth Weintraub, at 916 233 6759. I’ve closed many cooperative short sales; I know how everything works, and some sellers qualify for different types of programs. Don’t trust your future to some agent with an unproven track record. Get an expert.
