Saturday, July 10, 2010

Fremont Short Sales & Short Sale Lenders--Once Bitten Twice Shy

The last two short sales in Fremont that I performed were by no means smooth. And, I have become a little short sale shy as a result. Yet, other short sales in Fremont we recently closed had performed exceptionally well--Fremont short sales are sort of a mixed bag. What made the difference? The last two sort sales in Fremont were bad, but others were not. We discovered that it has everything to do with the lender of the original borrower or what we might refer to now as the short sale lender. Worst on the list was Bank of America who took an average of 10 months to perform a short sale and still not short sales were completed. And, what’s more, B of A was full of surprises. In fact, just about everything they did was a surprise. Imagine staring at a cocoon that has not hatched, waiting for something, anything to happen. That’s kind of what it was like. Everyone had to wait for very long periods of time even to acknowledge that the bank had received a document. Like watching the cocoon, any movement what so ever made us sit up surprised that something took place, even if it turned out to be nothing. Some things they did were remarkably abrupt and surprising. For example they upped a Fremont short sale price right out of thin air even after everyone agreed on B of A’s counter offer on price. They simply told us (oh, by the way) it was going to be $5,000 more. Then, at the final stretch of the transaction, B of A left out any considerations for the second lien holder and gave them zero on the approval certification. They later back paddled on that one, fixed it using a bad Microsoft Word edit that actually highlighted their mistake, then blamed my title co. rep with 30 years experience. Oh, I almost forgot one more thing. Another B of A Fremont short sale simply ended after an investor phoned and said they had just bought the property in foreclosure and for me to please remove my sales materials. This is the one where I even had a B of A rep authorized on the seller’s account watching carefully to assure us everything would go smoothly.

What makes a good Fremont short sale lender as opposed to a bad one? Most people if asked to judge a short sale lender would grade them on the speed in which the lender can process the approval of the transaction. Bank of America seems to take the longest. They boast about a 90-day turnaround, but unless the planets are aligned just so, it can take over a year to complete. Keep in mind that there are other conditions that can effect the time it takes to complete the transaction as Bank of America will be quick to tell you. The fastest short sale lender we have experienced was Bridgefield, a small lender who simply handled the whole thing over coffee.

Our Fremont short sale real estate agent office here is now performing another short sale in Fremont who's lender is Chase. Chase is large too, but they are more organized than B of A. The Chase negotiators (the ones that either handle the short sale approval themselves or present the short sale package to the investor) are very quick to act. Emails are returned the next day or same day. They also order the BPO (broker price opinion--sort of a snapshot appraisal for the bank to review) just as soon as possible.

But since we had been bitten by B of A, the Nosferatu of short sale lenders as of late, I am now shy to believe any short sale lender when they ask for something out of the norm. For example, our most recent Fremont short sale was in need of a BPO. I drove to the property to make sure the lockbox was still there 1. I opened the door and walked through the Fremont short sale. Suddenly, I discovered a tingling sensation at my ankles. Upon further inquiry, I realized I was being bitten by what must have been hundreds of fleas, and they were growing in number. What must have looked like a scene from America’s Funniest Home Videos, I darted to the door, locked up the house while running in place then ran into the parking lot. Once there, I swatted, shook, pinched then as a last resort, out ran all the fleas to be sure none followed. When I told Chase what had happened, they told me they would send Property Preservation out to take care of it. A red flag went up, and I got quite defensive. Once bitten twice shy, I thought they were going to execute some acceleration clause and foreclose on the house once Property Preservation was called due to fleas. They assured me this was not the case. Regardless, I told them not to call this third party, and that I and the BPO person would find a way to get it done. In short, we got it done without calling Property Preservation.

I will work on my uneasiness when it comes to trusting Fremont short sale lenders. After all, a Fremont short sale lender does not have to B of A pain in the neck.

1. For a period of time in 08, I happened upon many homes for sale in Fremont that were supposed to have a lock box only to find that they were missing. I would call the listing agent who would often be taken aback by the fact that it was just there a few days ago. I later found out that this was happening quite often on vacant properties. Perhaps squatters or desperate agents took the boxes so that no one else can show the house, I am still unsure. By Jeff Pereyda

No comments: