If you're thinking about buying a Sacramento short sale, find out if the lender is Countrywide before you pursue it. If you discover the original loan or loans are held by Countrywide, you may want to cross your forefingers, hiss and walk backwards. Countrywide, which is now owned by Bank of America, is a vampire.
The first inkling I had that something was amiss happened last week. Countrywide informed us that one of my Sacramento short sales was placed on hiatus because the borrower had applied for a loan modification. What the? That seller doesn't have a job. I called the seller. No, he had not applied for a loan modification, but he did call Countrywide in response to a letter he had received.
Yesterday, we discovered that Countrywide / Bank of America began mailing letters June 18 to a vast database of pending short sale sellers. If you haven't received your letter yet, it's probably on its way. That letter allegedly informs borrowers that they are eligible for a loan modification and, effective immediately, their Countrywide short sale is deactivated!
As if it's not bad enough that Countrywide emptied its queue of certain short sales due to a backlog in India a while back -- so most of my short sales required faxing paperwork 3 or 4 times before a new file was opened -- now Countrywide is deactivating its current inventory of short sales.
Countrywide just offered another Sacramento short sale seller a payment of $1,700 a month for three months if that seller would agree to a loan modification. This seller hasn't lived in the home for a year nor made a payment for 18 months, plus she owes $500,000. What happens after the three-month period? The letter doesn't say.
But I'm betting at that point the loan modification may be over. Countrywide has milked some of my other clients and then dropped their loan modification. It's the main reason these sellers began a search for a Sacramento short sale agent and found me. I've heard this story over and over.
You've got to ask yourself if the 3-month loan modification is a coincydink since it coincides with the 3-month foreclosure moratorium in California, which began June 15. And the only way lenders are exempt from the moratorium is if banks demonstrate they have a loan modification system in place. Sounds like a brilliant blood-sucking plan to me, if it's true: Stop the short sales. Pick up additional income. Foreclose on everybody else.
If you are a Sacramento short sale seller with a Countrywide loan who does not want a 3-month loan modification, you may wish to call Countrywide to say you want your file reactivated as a short sale. At this point, I don't know if Countrywide will start over from the beginning with a new file or simply pick up where it left off, but this deactivation situation is a nightmare. Oh, and go hang some garlic over your front door.
Elizabeth Weintraub is an author, columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout Sacramento. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you.
The Short Sale Savior, by Elizabeth Weintraub, available in bookstores everywhere and at Amazon.com.
Sacramento Short Sale Agent, Elizabeth Weintraub, has the answers to your Sacramento short sale questions.
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Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout the four-county Sacramento area. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. DRE License # 00697006.
The Short Sale Savior, by Elizabeth Weintraub, available at Amazon.com.
Lyon Real Estate is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.
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The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate.
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You have to love Countrywide and Bank of America. I used to think Homecoming was difficult; not even close now.
Yikes, my buyers have waited weeks for an answer to their over-asking-price offer, and now this. No wonder the listing agent did not respond to my update request last week.
I always read your blog to find out the latest short sale happenings--thanks for all the good information.
This is what a state gets when its legislators decide it's good politics to throw a (temporary) wrench in the system: unexpected(?) consequences.
Blogging enoute along I-5 in central CA!
WOW! Very interesting. I would guess this is a nationwide "thingie". So under the guise of helping people they are just prolonging the inevitable and trying to scam out a few payments. Sounds about right.
Thanks for the heads up. Hasn't happen to me yet. Did get a couple of these last year even though my clients didn't ask for a loan modification.
I've called all the listing agents I'm in escrow with waiting on short sale approval for my buyers to let them know they need to instruct their sellers to immediately call Bank of America on Monday. We're in the process of notifying all of my short sale sellers as well to call the bank. Gotta head this thing off at the pass before every single Countrywide short sale file ends up canceled. They constitute about 1/3 of all my short sale listings.
One poor seller has been waiting for Countrywide approval since February.
Elizabeth - First off let me tell you I love your illustrating graphic for this blog. Secondly, I had wondered if the 90 day California Foreclosure Moratorium Act wouldn't throw a wrench into the machinery of some of our goings on. It may be that Countrywide/Bank of America are going through the motions of trying to comply with the act, but at the end of the day - or the end of the 90 day moratorium, we will likely see these properties back in "short-sale" status, or in foreclosure.
The Act mandates that lenders prove that they tried to work with homeowners to help keep them in their homes via modification. There are exceptions and exemptions of course, but they are possibly sifting through all that!
I just can't imagine who is making the decisions to create this kind of confusion. Good Luck.
Hmmm...fortunately perhaps this is just a "pick on Elizabeth" thing...just kidding of course...we are closing 2 next week but will be on the lookout...they aren't our favorite lender either...but then again...we are out of favorites these days,,,blog on lady...
Oh, man! We had been in contract on a short sale listing since April, had EVERYTHING in, were applying for Phase II status for the Short Sale with CW and then---NOTHING. The BPO was ordered and I called and called the bank, asking WHERE is the BPO guy? Since early June, everything has stopped on this one particular Short Sale. The (CASH) Buyer finally bailed about a week and a half ago. The Seller is beside herself. The BPO order never made it to an actual BPO; they never called me for access to the property. It's the WORST situation for this Seller ever b/c we had a CASH Buyer that was gung-ho to get the property and now everything is at a stand-still. It's so sad.
I love the picture that you used with this post. It really conveys the feeling you must have had when you got the "great" news (read: sarcasm).
Great Update Elizabeth,
We are currently working with four properties on the listing side that have C-Wide, BofA. I will alert my sellers to make the call, just to be on the safe side.
But... as I understand it, the moratorium in California only extends to lenders who currently do NOT have a loan modification workout program in place. Since most of the big lenders (Countrywide-BofA/Wells/Chase, etc) have these programs (not they have made raving fans out of anyone in the process), that we would probably not see as much of a slowdown in foreclosures for Sacramento.
Again... thank you very much for the alert.
Hi Cathy: To be exempt, CA lenders do need to prove they have a loan modification system in place. And Bank of America, plus all the other larger banks have been in compliance to some degree. So I agree with you, we aren't going to see much of a slowdown of foreclosures in Sacramento. What I'd like to see, though, is some of those damn foreclosures come on the market. :)
Elizabeth,
Update from previous post. Your alert was dead on. All our clients had received daily calls since last Thursday. Since they had been well advised up to this point, every client refused the bait before I even notified them about this alert. They were glad to hear about this realtor link that explained the new B of A approach. Thanks again.
BTW.... as to the foreclosures - I wrote a little blog about "REO Train coming - Locomotive or Choo-Choo". I mostly ask for local REO agents to chime in. Even in my humble circle, Rumblings of REO's being released is picking up steam - I wonder if it is true.