Louisville Short Sale Expert: Helping You Avoid Foreclosure

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Bank Of America Inflicting Short Sale Losses Upon Itself

September 24th, 2011 |

Author: admin

By David Halpern, Louisville Short Sale Expert, (502) 664-7827 or 895-3100.

Bank Of America’s policies for processing short sales are short-sighted and will cause countless millions of dollars of unnecessary losses that could have easily been avoided. BOA threatens the seller that they can be pursued with a deficiency judgement if a short sale is approved.

Millions of homeowners who have unbearable ”upside down” mortgage are turning to short sales to sell their house. In a short sale, the lender accepts an amount short of the payoff and usually forgives the deficiency. Lenders nationwide have realized that accepting a short sale settlement now is more profitable than spending a year foreclosing on house and taking ownership of an abandoned house in unknown condition in a declining market while paying taxes, insurance, maintenance and utilities.

The seller’s primary motivation is to get out of debt and avoid foreclosure and possible bankruptcy. A short sale is much more labor intensive for the seller than just living in the house for free for a year until the foreclosure auction. The seller is doing the lender a favor by working the short sale and helping the lender reduce its losses. In return, the lender usually forgives the shortage. Not out of kindness, but out of self-preservation. If the lender doesn’t make that concession to the seller, why should the seller go through the short sale hassle? Why should the seller pay rent somewhere when they could live for free for many months or a year or more?

Enter the brilliant decision makers in Bank of America. BOA has imposed strict rules insisting that borrowers that do them the favor of a short sale are threatened with the possibility of being pursued for a judgement. The exact language; “BAC Home Loans Servicing, LP and/or its investors may pursue a deficiency judgment for the difference in the payment received and the total balance due, unless agreed otherwise or prohibited by law, if the short sale closes on the reference loan above.

Here is what sellers are saying to Bank of America:

“Screw that! If you won’t work with me I’ll just stay here and file bankruptcy the day before the foreclosure auction, then live here yet another six months at your expense.”

Or, “Screw that, I’ll abandon the house and let it rot to the ground and file bankruptcy on the deficiency.”

Here’s what Realtors who specialize in mitigating bank’s losses by working the labor intensive short sales are saying; “I’m boycotting BOA short sales. No way I’m going to put up with BOA’s inefficient short sale processing for 6 to 12 months just for them to strong arm the seller into bankruptcy. All my work on the short sale listing will evaporate and the house will go to auction.”

Agents representing buyers who make offers on short sale listings are already inquiring if the foreclosing lender is BOA. If it is, they refuse to make an offer and they just move on thereby leaving another loan to continue to bleed on the BOA balance sheet.

The executives on the BOA golf course will never make the connection between their self-destructive policies and tens of millions or hundreds millions of unnecessary losses. For the sake of homeowners and the economy in general, let’s hope that someone in BOA figures this out.

>Submit Your Information Now or Call Us at (502) 664-7827 or (502) 895-3100.

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Amazing Story – BOA Forgets to Foreclose on a $300,000 Loan for 3 Years

July 24th, 2011 |

Author: admin

This is a true story. The greatest fiction writer could not make this up. We will call the homeowner “Sally” for illustration purposes.

Sally files Chapter 7 bankruptcy.
Sally includes her $300,000 loan in the bankruptcy and moves out of her Louisville Highlands home.
Sally never makes another payment.
Loan officer tells Sally she can get a new loan 3 years after bankruptcy.
Homeowner waits 3 years and applies for a loan.
Loan officer tells her she doesn’t qualify because she still owns her house with a $300,000 balance. She still owns it after all these years.
Sally is confused and calls me.
I look up her house on public records and, Yup!, it’s still in her name.
Sally says it can’t be, because she filed bankruptcy.
I tell Sally that bankruptcy doesn’t convey ownership of the house. She has to (a) sell it, or (b) convey a deed-in-lieu of foreclosure, or (c) the bank has to foreclose on it.
Sally says her bankruptcy attorney didn’t tell her that, therefore it can’t be.
Sally comes to my office.
Surprise! Her lender is Bank of America.
We call Bank of America.
Bank of America customer service lady looks up Sally’s loan.
Customer Service lady says: “I see your last payment was made 3.5 years ago, you now owe $84,000 in back payments. Are you planning to pay this today?”
Sally manages some niceties and we politely hang up.
Sally asks me how this can happen, and “Why didn’t anyone explain this to me 3 years ago?”
I welcome her to the insanity and the inanity of the preforeclosure world.
Sally calls her loan officer who says she may now have to wait another 3 years after foreclosure or deed-in-lieu to qualify for a loan.
Sally then tells me what I’ve heard many times before: “Dave, I wish I had met you 3 years ago. I would have done things differently.”

Lessons:

Even if filing bankruptcy, sellers with underwater mortgages should also consult a short sale Realtor. It may save you from foreclosure and bankruptcy.

Submit Your Information Now or Call Us at (502) 664-7827

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Tags: Bank of America, Bankruptcy, Chapter 7, Dave Halpern, Foreclosure, Lenders, Louisville, Real Estate, Short Sales |

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