I’m so sick and tired of hearing about upcoming webinars and interviews with the top brass of Bank of America in which they’re going to discuss “all the great things” they are doing to help homeowners with short sales. It’s such a crock of crap. The bottom line is, and will ALWAYS BE, about the money, NOT THE HOMEOWNER.
Every0ne i
s familiar with the latest attempt of this institution to charge its account holders $5 per month to access THEIR OWN MONEY through ATM locations. Fortunately, account holders stood up, applied pressure, and sent management back to the drawing board to drum up some other way to get more money from their customers.
But I want to explore a somewhat less understood arena….short sales.
When a homeowner is in default due to a legitimate hardship, whether caused by job loss, medical issues, divorce, or a host of other reasons, a Bank of America rep calls the homeowner and explains “workout solutions”, which almost always starts with suggesting a modification.
Why?
Do you want the honest TRUTH?
Because the way the modification program is set up, the homeowner CONTINUES TO SEND IN REDUCED PAYMENTS!
Do you really think that the lender has an honest interest in making the modification permanent?
Absolutely not.
It’s all about cash flow. As long as the payments are coming in, they’ll string the homeowner along through the process.
Why else would the approval percentage of modifications still be UNDER 20% since they started evaluating modifications under the government-backed HAMP program in April of 2009!
Why else would the homeowner’s financial package be “lost” an average of 4 TIMES during the process!
It’s about the money. Period.
(There’s a lot more to modifications, their failure rates, how broken the process itself is, and the limitless number of homeowners that have been misled down this path, but I want to focus on short sales and Bank of America’s “latest idea”.)
Bank of America has been an absolute disaster in the short sale arena for as long as I can remember. After they got so overwhelmed with requests for short sales a couple of years ago, they started using an online 3rd party software called Equator, to manage it all. When they decided to roll out its use for short sales, the did so BEFORE their staff was trained, BEFORE they had systems in place to manage the changeover from the old fax-in-your-package-and-wait-60-days-for-a-negotiator system, and BEFORE ANYONE within Bank of America could answer any questions about how to use the software.
Brilliant.
At the end of the day, who do you think suffered?
The homeowner.
Thousands, and I would venture to say, hundreds of thousands of homeowners that had short sales in mid-process, now either had to start over with the Equator system HOPING that they could figure it out, or had their situation fall through the cracks as they ended up in foreclosure, with the canned response from Bank of America representatives being that “there just wasn’t enough time” to stop the auction.
Now they’re at a point where the Equator system/process is actually working for them and successful short sale closings are much more common than they used to be.
But not so fast.
About 2 weeks ago, those with Equator accounts, which includes listing Realtors, law firms that process short sales, and 3rd party loss mitigation companies like mine, received emails stating that all licensing information had to be updated within the Equator system.
No big deal, right?
Wrong.
Here’s the thing…
A license IS NOT REQUIRED in all states to help facilitate a short sale. In fact, lenders have made short sales so difficult to complete that an entire business model has developed to help the many Realtors that simply refuse, or don’t have the experience to deal with them themselves.
The reality is that the vast majority of Realtors simply don’t have the time to sit on hold with a bank for hours on end, dealing with the piles of paperwork, red-tape, lies from negotiators, etc., etc. to get short sales done.
After all, a Realtor is a Realtor to SELL HOUSES, not spend the majority of their time buried in short sale paperwork and endless hours on the phone.
Now Bank of America would have you think that this requirement to update license information in Equator is now in place so that they can eliminate fraud.
Eliminate fraud?
Give me a break.
Follow the money and you will find the REAL reason.
I’ve spent hundreds of hours learning how to do short sales correctly. Studying all of the different requirements and guidelines of FHA, conventional, VA, HAFA, the effects of mortgage insurance on short sales, how to eliminate additional liens beyond the mortgages in place that were used to buy the property, and on, and on, and on. Most of my knowledge has come from ACTUALLY DOING short sales, hundreds of them, and for this knowledge and experience, we get paid by the buyer in most cases because our expertise helps them get to closing faster.
Waitaminute.
Did I say that we get paid by the buyer?? That’s it!
Bank of America doesn’t want us (3rd party companies) processing short sales because if we’re getting paid by the buyer, we don’t have Bank of America’s best interests at heart!
Well, guess what B of A? If a deal is approvable, it’s approvable….period. Why should a buyer have to pay more than necessary to close the deal?
Wait…..I know the answer……
Because if you can get the buyer to pay more money, you will! And if that means taking advantage of Realtors that are time-starved, extremely mobile, and overworked by your ridiculous short sale processes, than so be it.
More money is more money. ….job well done.
And in the words of a Bank of America representative that I spoke with today about this exact issue, when I explained that a service like ours actually helps keep property OUT of foreclosure, making things much more efficient for the listing agents involved, allowing them to spend more time marketing and selling property, his response was, “If the Realtor doesn’t want to learn the red-tape involved with short sales and EARN their 3% commission [on the listing side], then we’ll gladly foreclose”.
Nice.
True help for homeowners at its finest.
Here’s the bottom line…(and I use the term, “we” below to mean all reputable, 3rd party negotiation companies)
Since we know the guidelines inside and out, since we know what the thresholds are for different investors, since we know how to engage the Office of the Chairman when the negotiator is being a pinhead, since we know how much of a better deal a buyer can get if mortgage insurance is involved, since we know exactly, to the penny, what is approveable in an FHA short sale, since we know how to challenge them when the value they’re using is totally unrealistic for the market, and most of all, since we know THEIR GAME, they want us out.
They want only Realtors with so much other stuff going on in their businesses, Realtors that are so frustrated with all the red tape involved in getting the deal processed, Realtors that are so tired of the back-and-forth with unrealistic counter-offers and requests for cash from homeowners at closing or the signing of promissory notes, Realtors that through no fault of their own just don’t know the DETAILS OF THE GAME, submitting short sale offers because in the end, Bank of America will MAKE MORE MONEY! Their negotiators will be able to counter offers submitted with unnecessary requests, getting Realtors to buckle from simply a lack of knowledge or due to the need to just get the deal done for the sake of their client. Bank of America will be able to basically lie about what it will take to get the deal done, just because they can.
Bank of America will say they are just “mitigating loss”, doing their job for their investor.
But what about the homeowner? If an offer is submitted on the property that is approvable according to the given guidelines for that short sale, why not approve it so the homeowner can avoid foreclosure?
One guess…..
More money!
At the end of the day, that’s all that matters.
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