Archive for month December, 2009

Don’t Trust the Sun

Thursday, December 10th, 2009

A couple of months ago, I was in the middle of one of the most unusual short sale transactions I have experienced in the last four years. In this particular case, I was representing the buyer. This was the listing agent’s first short sale transaction.  So after explaining my experience with both the listing agent and the seller, the seller authorized me to assist in negotiating with the banks.

The seller was legally an LLC, not an individual. It is relevant, however, that the Lender’s negotiator was a vice president at a local Bank similar in name to the title of this blog, rather than the national 1-800-number. With the exception of dealing with this negotiator, throughout the transaction all had gone well and smoothly.  Nothing interesting in any way, unless you are one of the parties to the transaction.

What made this blog worth writing was the negotiator. Again, this is a vice president. This negotiator would only talk with the Seller. He literally refused to put one word in writing stating that the only thing he will do is sign the HUD-1 after the transaction is closed, if it meets his agreed criteria. On the other hand the underwriters for the buyer’s loan would not give their approval without something in writing saying that the closing would remove all liens from the property – and the only piece of paper missing was from this vice-president.

A vice-president in charge of loans at a major bank cannot have that position without understanding the requirements of the underwriting department. It is not possible for this person not to understand that without a written document approving the removal of the lien, the underwriters will not release the loan.  He must understand that the closing table is dominated by attorneys, and no attorney will believe the spoken word of anybody — it must be in writing. So, we are at an impasse.

Of course, as you would expect with such a strange reaction, there was a back-story that we did not know until just before the end.  The bank was negotiating a multi-faceted lawsuit with the managing partner of the LLC which included a large cash settlement.  We got our one-sentence approval the day that VP got his $55,000 cashier’s check.  It became very clear to us that this was the bank’s intended strategy — to use the pressure of the delayed and re-delayed closing to force the seller to respond to the lawsuit settlement.  This does not excuse, however, the downright rude attitude of the executive representative of the bank. It also underscores the fact that lenders will do whatever they feel they need to do in order to achieve their results, with no regard to what is ethical or fair to the other parties of the transaction — such as giving us a clue of what was going on earlier in the process.

Although it turned out well for all parties in the end, I am always interested in suggestions that might have avoided all of the stress on everyone involved in the transaction. And in the meantime, if any of you run across a negotiator who refuses to put anything in writing, maybe this blog will give you the clue I was missing all along.

The Top Ten Simple Rules

Wednesday, December 2nd, 2009

Yesterday was Foreclosure day in GA. For the 5th time, I saved one of my listings that has been going through a Short Sale process since April 2009.  I spent over 4 hours calling Bank of America and then arriving to extreme measures to be able to beat the incompetence that we Agents live with every day with the people who answer their phone.

I was asking the person who answered the phone for the 6th call in two days if she can tell me a number, just an estimate number, of the Foreclosures they have every month because their Departments do not talk to each other…. Obviously I did not get an answer. I think the number is BIG.

I’d like to use this forum to generate a top 10 list of our own.  The Top 10 Ways make the people who work in lender Loss Mitigation departments more productive.  What do you think?

If you have done short sales for a while, there’s no doubt that you have your own suggestions for what could make the process easier for all involved. We all know how bad the problem is. And it is growing worse.

Lender Loss Mitigation Departments are overwhelmed.  Anyone who has been negotiating with the large lenders over the past 3 to 6 months, I am sure, has seen the same change I have seen. The Loss Mitigation Departments cannot keep enough trained people on staff to process the workload. Response times are getting longer and longer. The responses are getting less and less competent. The incidences of just plain rudeness or clear demonstrations of a lack of training of their representatives is increasing in frequency; but remember those folks are paid hourly regardless of whether they do a good job or not. As a consequence, our buyers are walking away, and our Sellers are going to Foreclosure.

It is not right that the incompetence and in adequacy of the lender’s management and training programs cause us to work harder for even less money. But what can we do? They’re the lender. They have the money. They have all the cards and control the process.  It’s their way, or the highway.

But what if…?  What if we could make the rules?  What rules would we make up?  I would like to use this post to spark a contest.  Please post by way of comment on this blog your suggestions for how the lenders can improve the short sale process.

And let’s have some fun with it too. While this is a serious subject, one which affects our livelihoods, there’s no reason why we cannot enjoy ourselves in building up the list of suggestions for our favorite whipping boys in the loss mitigation departments of major lenders.

I would ask you to keep it short; no more than two sentences for a rule. The rule should be focused on loss mitigation departments.

This could actually be the start of something big… It might become the vehicle by which we developed a referral network specifically targeted at short sales; or maybe an industry-specific focus group. There are many ways and many directions in which this can grow. Let’s start with some simple top 10 rules for loss mitigation departments, and see where it goes.

Let me throw out one simple example rule just to get us started:

  • Answer the telephone with a smile and the honest intent to help the person on the other end. If you can’t do this, then work on your files and computer screens until you’re in a better mood (kind of hard with the increasing incompetence…)

So share your ideas for rules with us. Let’s all hear what can be done to make our lives easier. Who knows, maybe Bank of America is listening. Maybe one of us has the ear of the senior executive at Wells Fargo or Bank of America and can present this list of them. Or maybe, just maybe, reading through a bunch of humorous rules will lighten the day of our fellow agents.

So let’s have some fun, and if it can be productive fun so much the better!