Kris & Kim Darney

Countrywide can spell “NIGHTMARE” for a listing agent working a Short Sale with them. It’s also a lesson in Patents for the Seller of the property.

Yesterday while going through the dozen or so short sale files I have with them one thing was consistent with every file. A new negotiator was being assigned to these files almost daily….sometimes 3 in one day. Can you say “Pass the Hot Potato” !

If your a seller and have a Short Sale in process with Countrywide/BofA this may help you on what to expect. Also, your agent will be working with your lender to do everything possible to expedite that approval…believe me! You may be asked for updated income information on what seems to be a weekly basis…Just remember, the Short Sale is going to help you get a fresh start.

Countrywide has a 3 Phase Approval Process.

Phase 1 – Getting A Negotiator Assigned: This “Phase” according to Countrywide should take 10 Business Days

Phase 2 – Negotiator works the file and prepares it for the Investor: This “Phase” according to Countrywide should take 30 Business Days

Phase 3 – Investor Reviews Offer: This “Phase” according to Countrywide should take 10 Business Days.

The Real Story:

Phase 1-Assigning a Negotiator can take up to 60 Days

Phase 2- Negotiator Prepares Short Sale Package for Investor: Here is where it gets very convoluted…Countrywide swaps out negotiators on files like new moms change diapers! We have had 3 negotiators in ONE DAY! This is a huge problem because Countrywide allows “each negotiator” 30 Days to work the file…before they are accountable to “note” the file. This can make Phase 2 seem endless!

Phase 3- Investor Review/Approval: Real time is about 30 Days.

I do have to give kudos to “Bill” a supervisor in the Short Sale Department at Countrywide. I emailed him and explained my confusion and frustration of “swapping” negotiators and in fact giving his employees a free pass on any accountability! “Bill” responded to me to my surprise, he actually took charge and has been working with “the same” negotiator to get that file off to the investor for approval. Thanks Bill!

A short Sale is your best alternative in this economy if you can’t afford to keep your home. Just be mindful of the time it may take if your lender is Bank Of America/Countrywide.

There is talk that President Obama is going to mandate a Streamlined Short Sale in the near future.

If your considering purchasing your first home...don't wait much longer to take advantage of the $8000.00 tax credit. You must meet the qualifications of the 1st Time Home buyer to Qualify. The tax credit is up to 10% of the purchase price of the property not to exceed $8,000.00 credit. A home with an $80,000.00 home price qualifies for the maximum credit...that's like getting a 10% reduction in price without having to "haggle" over the price.

In today's market, the home buying process can take 30 to 45 days.

What will take place during that time...

• You'll need to open escrow with a "good faith" down payment. This down payment will be released to the seller at the end of the transaction as credit to the purchase of the property.
• As the buyer, you will have a specific time frame to complete any inspections. (California, allows 17 days after opening escrow to complete...upon which time has elapsed, you have essentially given up your right to cancel escrow should inspections reveal any non-disclosed issues with the property or you fail for any reason to secure financing.

1st time home buyers, this is great time to take advantage of a well priced home and get a perk of an additional refund that essentially lowers the price up to an additional 10% below the offer price.

The housing market is crashing, many families have felt the strain of loosing one or both incomes. We are working with a family right now that is loosing their home due to job loss for one and reduced hours for the other. They could not afford to keep the home with their wages, even with a loan modification.

I want to share this families experience with our readers. We get so many questions relating to Jr. lien holders and recourse or non recourse loans. We’ve talked to many reputable attorneys at length on the subject and have learned some very interesting and useful information to pass along to our clients. But as we always remind our readers and clients, we are not attorneys so please consult with an attorney that specializes in Real Estate Law.

Mr. and Mrs. ” Smith” have a first and a second on their property, (Jr. Lien Holder). The second holds a note for about $150,000.

After long negotiations with both lenders we have hit a road block….

There is no problem with the first accepting the short sale offer, they are ready to release the property from their inventory and avoid having to foreclose. They have offered the second $2000, the maximum allowed to be paid a Jr. Lien holder accoding to their investor.

Jr. Lien Holder will not accept that pay-off. They will not release the lien for $2000, they requested the “borrowers” sign a promissory note for the entire balance due. Well, this was not favorable to the sellers for obvious reasons!

Round Two:

We negotiate a lower amount for the promissory note and present that to the borrowers. In the mean time they have consulted with an attorney about filing Chapter 7 Bankruptcy. Their consultation was not what they expected to hear….they make too much money! In their world they are insolvent…loosing a home, lost 2 vehicles to repossession and are still trying to find a place to live that they can afford to rent.

They now are faced with some very serious decisions.

According to attorneys that we have consulted with a Jr. Lien holder has a statute of 4 years to “lie and wait” in other words attempt to collect the balance due them. This can happen even if they “release the lien” and allow the property sold at short sale.

With that said, even a foreclosure does NOT RELEASE that possibility, unless you are able to file a Chapter 7.

Attorneys will most likely tell you this: There are two types of foreclosure on real property in California. Judicial Foreclosures done through judicial (court system) and Non Judicial Foreclosure done by trustee under California Civil Code Section 2924. Most lenders foreclose Non Judicial as it is relatively fast and inexpensive. In this case the lender waives right to deficiency against borrower.

For those that don’t qualify for bankruptcy and only have one loan on the property a foreclosure (as long as the lender uses non judicial) appears to protect you from the lender going after the deficiency.

Now if your following this, and asking yourself what if I have a second on the property??? (Most of our clients here in California do)

Again, not being an attorney….

Unless you are able to file BK to release your debt the Jr. Lien holder has 4 years to “lie and wait”. So a foreclosure still leaves you open to that Jr. Lien Holder balance.

We have been working with more and more homeowners recently that have made the decision to Short Sale their home due to the fact they just want to cut their losses now and rebuild instead of back peddling for years before they regain any equity. To date, not a single lender has refused the Short Sale. Although for some of our clients with means, the Jr. lien holder has required a “settlement” either paid over a period of years with zero interest, or a lessor amount if paid at close of escrow. These settlement terms have insured the sellers that they will not be sought after for a deficiency judgment. For some, a small cost to “release” in most cases several hundred thousand dollars of negative equity.

Something to think about……

It’s not often that I get a Short Sale Negotiator on the phone that has the willingness, skill and desire to do their job. I had spent the entire morning on calls to multiple lenders, my last call was to Washington Mutual.

While on hold trying to find out why it had been nearly 3 weeks and we still had not recieved approval to sell after meeting their counter offer….? We started talking about Wamu’s internal process…wow, it’s no wonder they are taking up to 90 days to process a Short Sale!

“Wamu” expressed true concern for her co-workers. The fact is, this lender is not equiped to manage through the volume of Short Sales that are coming in. From our conversation, it sounds like what they have done to handle the volume is “Add additional Steps” to process the Short Sale…in other words…DELAY.

It’s no wonder that these Short Sales are taking so long to complete. Think about it, these lenders don’t want to approve too much loss…too quickly. Prior to the Short Sale utilizing “Mark to Market” economics the property is looked at as an asset… Can you say…SHADOW INVENTORY!

I’m not an economist, far from it. But in my humble observasion….

Short Sales ensure a buyer, the home then generates city taxes. The community gains a homewoner that will most likely have pride in ownership and utilize local business to maintain the home. Values in neighborhoods start to stabalize with each home sold…contrary to declining with each foreclosure.

Enough already! I’m sick of the lip service….

Hope for Homeowners is an embarrassment to Mr. Obama. If you live in California, you have realized that a loan modification is easier said than done….

Lenders have been instructed to help their borrowers find alternative to foreclosure and since the loan mods are out for most of us….the solution…Short Sale! Along with that, President Obama rolled out a wish list of mandates to get these lenders on board to support these Short Sales. Obama states that their needs to be a Short Sale Process, and shorten the approval time…yada…yada…yada this rolled out May 14th, 2009

Makes perfect since…So what’s the problem?

Below, a series of emails between a negotiator at Countrywide/BofA and us.

(Countrywide/BofA)

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“Mimi Bishop” <Mimi_Bishop@Countrywide.Com> wrote:
Please read carefully…….
Please email & fax the documents to 888-491-4947

I am the short sale negotiator that will be working on the above

referenced file. Please make the following revisions to the HUD & return
to me no later than 2PM CST time on 04/24/2009 or the file will be canceled. Please read the disclosure at the bottom of the email for
further instructions.
PLEASE BE ADVISED THAT THE CHANGES MADE TO THE SETTLEMENT STATEMENT ARE
NOT NEGOTIABLE & IF CHARGES NEED TO BE PAID, THE SELLER (HOMEOWNER), BUYER
OR AGENTS WILL NEED TO PAY FEES.

PLEASE MAKE SURE ALL DOCUMENTS ARE BACK TO ME WITHIN TIME FRAME OR FILE
WILL BE CANCELED!

PLEASE MAKE SURE LOAN NUMBER IS ON ALL PAGES. FAX THE DOCUMENTS AT LEAST
24 HOURS PRIOR TO THE DEADLINE TO ALLOW TIME TO UPLOAD THEM INTO THE
SYSTEM.

Thank you.
Mimi Bishop
Workout Negotiator III
> LP-Short Sale R
> Mimi_Bishop@countrywide.com

(ME)

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<!--[endif]-->This is my 7th offer. The buyer is capped out at $XXXXXX. The buyer cannot afford the HOA costs. Can your investor please take this into consideration? Also, could you tell me the investor on these loans?

(Countrywide)

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<!--[endif]-->****transfer to buyer settlement cost ; all HOA fees, assessments; transfer
fee; doc fees; refundable padding; doc prep fee, sub escrow , overnight
mail /wire fee, misc recording fees, *****

(Me)

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<!--[endif]-->My 1st offer was submitted in November 2008. The buyer finally walked in January with no response from Countrywide.

I have had over 7 negotiators on this file and 6 months of work now everything is urgent? Can I have until Monday?

I appreciate your position, however, I am at a loss with your demands of this request and getting them achieved by tomorrow

(Me)

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I just saw that these items were all to be faxed 24 hours ahead of deadline? That was an hour ago? Should I just forget about it?

(Countrywide)

NO RESPONSE

We met Countrywide’s deadline…but they took an additional 22 days to “PROCESS THEIR PROCESS” and send approval to sell. You guessed it, by…by…buyer!

****We are not alone in the Countrywide Quagmire…I’m dealing with them are experiencing the “90″ Day Plus response time.****

Good News….New offer $30,000 higher than the approved offer.

Bad News.…Countrywide is going to close the file because their policy wont allow them to “swap out buyers” ??? yes, that is a direct quote from the negotiator when I asked her if she could review the new offer with the investor!

President Obama….stop spending so much time, energy and money telling America how lenders Need to Find Alternatives to Foreclosure! Your the President of the United States…you can put enough pressure on these lenders to comply! STOP THE LIP SERVICE.

USE THE MEDIA TO CALL OUT “BAD LENDERS” POINT FINGERS…YOU DO IT IN YOUR CAMPAIGN’S!