If I hadn't heard the words from Countrywide's short sale negotiator myself, I may not have believed it. Countrywide started out in this business as a bottom feeder, and I offer this story as evidence that Countrywide is returning to its roots. The demand Countrywide made yesterday on a short sale was vicious with an evil undertone.
A common factor among many short sales today is some lenders want the sellers to make a cash contribution at closing. That's not unexpected in some transactions. We had negotiated that contribution for the sellers down to $2,500, even though the sellers did not have the cash in the bank. They had planned to borrow the money from their parents.
This couple's situation is a classic short sale case. The wife suffered a miscarriage and was diagnosed with a severe medical condition that forced her to quit her part-time job. They struggled to make ends meet. She became pregnant again, carried the baby to term just as her husband's business blew up and medical bills escalated. Their home was upside down. They called Countrywide to see if they could do a loan modification, but since they were current on their payments, Countrywide rejected them and suggested they try a short sale.
We listed the home 6 weeks ago and the sellers left Sacramento. The husband found a new job in the Silicon Valley, they rented a house there and were in the process of trying to piece their lives back together when the demand for $2,500 arrived. But their parents would step up to the plate to help them.
The clincher is that within an hour of approving the short sale under those conditions, Countrywide's negotiator called back. Seems she ran the sellers' credit reports and discovered the sellers have great credit scores. They pay their credit cards in full every month, the negotiator said. Under those conditions, Countrywide changed its mind. Why, the sellers have the ability to tap those cash-advance credit lines. That's the ticket, said Countrywide. The sellers should go further into debt to the tune of 24% interest and take out cash advances on their credit cards.
Now Countrywide wants a minimum of $5,000, "probably more," the negotiator said, and even though the sellers don't have the money, they have the ability to borrow it from another bank. Apparently, the sellers haven't suffered enough.
This, after the short sale was approved!?! It's akin to kicking a guy when he's down and raping his wife.
Why should the sellers agree to this when they can walk away and owe nothing? The negotiator continued, "They haven't made a mortgage payment since November."
"You know what? They aren't going to pay February, March, April, May, June, July or August, either," I replied. "So you can foreclose and take a bigger hit, or you can stick to your original proposal." The negotiator turned a bit testy, saying something about personal liability after a foreclosure, but I cut her off. "There is no personal liability on purchase money loans under a trustee's sale," I said. "The worst case scenario for this couple is they won't be able to buy another home for 2 years versus 5 for a foreclosure," adding that maybe she would like to read my book on short sales that's coming out next month.
The bottom line is Countrywide would not approve a loan modification because the sellers were current on their payments. Now Countrywide won't approve a short sale because the sellers are behind on their payments, unless the sellers agree to plunge further into debt. Do you see reasoning in this logic?
Maybe a better question is should Countrywide receive your tax dollars and benefit from the $750-billion bailout? Parent company, Bank of America, is watching its stock plunge and requesting billions more from the government. Should we give it to them?
The Short Sale Savior, by Elizabeth Weintraub, coming to a bookstore near you in February.
Photo: Big Stock Photo
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Certified HAFA Specialist
My Sacramento Real Estate Listings
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.
Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.
The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate.
Disclaimer: If this post contains a listing, information is deemed reliable as of the date it was written. After that date, the listing may be sold, listed by another brokerage, canceled, pending or taken temporarily off the market, and the price could change without notice. It could blow up, explode or vanish. To find out the present status of any listing, please go to elizabethweintraub.com.
And they wonder why things are in a mess?
Elizabeth, this sounds like a Dilbert cartoon. Unbelievable. We have been encouraged by our broker to contact our Congressman when this type of foolishness starts. I would encourage you to do that. I think Congress should know how the banks are not really working to solve problems but working hard to create more, on a daily basis...Excedrin, please?
It's just business as usual for Countrywide. The banks are the big beneficiaries in the so-called bailout. Unfortunately, I believe we'll see many more of these cases. There never was any meaningful plan to help homeowners.
It is a slippery slope, and there seems to be no consistancy. But keep in mind that lenders do not win in a short sale or a foreclosure. the Negotiators are probably trying to cut the blood flow as much as possible. Home owners should not walk away smelling like a rose from a short sale either. They agreed to pay back the mortgage based on the terms, signed the paper work... etc..... Bad things happen to good people, and that is a shame. But ...
I'd like to read that book myself!
As to this story, nothing surprises me anymore...
This is truly unbelievable! I am shocked, what has happened to integrity and honesty? People show their true colors when money is involved. This is disturbing to me, why do people not want to help others? Or not even help them, but just not rip them off?
Elizabeth--Now that is just horrible...Another instance of punishing those who have been trying to do the right thing all along. Very sad...Hope everything works out for this couple.
That is horrible! No wonder they are in the position that they're in!
It does sound like a Dilbert cartoon, Sharon, except more sinister. You know, there's a reason I let my associate talk to the negotiators. I like to be happy a person, and I'm NOT a happy person when I speak to them. For some reason, the negotiator could not reach my associate yesterday, which is why she called me. I learned from my associate this morning that Countrywide closed the file yesterday. The woman we are dealing with is a junior negotiator, and my associate enjoys a good working relationship with several senior negotiators, so getting the file reopened.
The other thing is, like most short sales in Sacramento, we received multiple offers on this property. It ultimately sold for almost $25,000 over list price. I'm not 100% confident that the home will even appraise by the buyer's lender for the sale amount! A logical person would say Countrywide was extremely lucky to receive such a generous offer. So, I don't believe it's the sales price that is driving Countrywide's demands. It wants blood. And that, in my book, is evil.
I, too used to be on the other side where I believed we should all pay what we agreed to. But after a couple of years of watching Wall Street, the Fed and Treasury, and lenders draw from TARP, credit card companies throw money at every warm body, I think this:
As individual buyers, borrowers and Realtors, we relied on lenders, their underwriters, their loss prevention managers their their bosses (read Mozillo @ Countrywide) to appraise our properties assess our ability to repay and to see through all the garbage, after all, they had the top level vision not posessed at the individual level.
Not only did they fail us, they put us into this fraudulantly and collected large bonuses to buy their toys and Manhatten condos.
They need to hold their own bag.
But practically speaking, your client just has to figure out the price they're willing to pay for their credit rating. $5k is cheap.
Jaded
Elizabeth: I think I need a bucket so I can vomit. Countrywide is beyond repair. They'll be torching their buildings next and asking for insurance money. Why not? Fraud isn't a four letter word.
I hope you are able to beat them back down into submission. Your clients deserve better than this.
Countrywide needs to go out of business and fast. Seems as if it might using these tactics.
These negotiators need to take a class in logic and common sense.
I'm appalled with how CW handles things. I've had a short sale in for 7 mos. and going nowhere. CW has no integrity and it won't be a name I'd recommend to anyone.
Patricia Aulson Portsmouth NH Real Estate
Elizabeth, the rules makers drive the behavior, so why should be surprised how even credit worthy families on hard times do what they have to do? I'll keep my opinions about Countrywide to myself but you have already called them out.
this economy is were it is because of greed and these companys should fold up like a chair and experience the loss that us americans do. Its distgusting to hear that. Some people have no sympathy.
One of the tools I saw the attorney doing the negotiations do was telling the negotiatior that if they do not agree on the short sale, and then slip into foreclosure, and finally end up selling for less than is on the table right now (seems like in this case), the attorney told them that he would sue them on behalf of his client, as he would show to the judge that they had a better offer on the table, and did not go with it, and at the same time now sold for less and the rest is income. I think such lawsuites already happened but I am not 100% positive.
How unprofessional of Countrywide to get greedy. Was the original approval in writing?
Hi Elizabeth,
I don't believe in Big Brother tactics, but in the case of Countrywide they should be reported yet again and the government needs to step in. Bank of America is the indirect beneficiary of these tactics and I doubt they will intervene in a timely manner, if ever.
Ridiculous. I haven't had a lender ask for the seller to bring money YET, I'm appalled that they would do this. NO it's not a win situation for the lender to do a short sale or foreclosure, but it still makes since to cut losses early. I have had short sales that went for $20k+ below our original offer price because of a banks lack of desire to make something happen..
They are asking for a bailout while the "little people" have to lose on every level. No money, ruined credit, loss of jobs, homes, etc. NO one wants to go through that intentionally, but it happens. Right or wrong, at least the consumer in this case is trying to sellt the home vs. just walking away. That should count for something?
I think this story is absolutely insane, but unfortunately it doesn't surprise me. You get to hear so much these days about people falling on hard times and the reverse logic of banks and other companies that nothing really carries any shock value. All I can say is that I hope I never have to deal with Country wide on any short sales.
They are just going to have to refuse and let the house be forclosed on. I did a short sale 2 yeras ago where the seller's demanded $5000 to participate in the short sale and not give the house back. The bank gave them the money! I was shocked. (It was Regions Bank)
There is an old saying: "Everything that goes around comes around." Countrywide is obviously in bigger trouble than we thought. They are going to wind up with alot of over priced inventory on their hands that they can't get rid of. Their thinking is not rational. I look forward to reading your book.
Absolutely EXCELLENT post Elizabeth! I would love to see this post go to the media that keeps stating that there are such great options available for delinquent homeowners. Thanks Elizabeth!
I think it is a shame tha our Congress is so stupid, lazy and disgusting. They throw money at scum like CW and others while the ordinary citizen suffers daily.
How do you spell Countrywide? G-R-E-E-D!!!
Country-wide and Bank of America are a perfect example of engineered incompetence! Of course there are plenty of others too. And we still can't figure out where all our "bail-out" money went!! There is not enough outrage over this mess. Do you remember the anti-cigarette ads a couple of years back? "Where's the outrage?" was the catch phrase. This even more outrageous than the tobacco companies as far as I'm concerned. At least there is a surgeon-generals warning on cigarette boxes! What warning did people get about these predatory loans? "Don't worry about that, you can re-finance in a year"..... that was their warning. I wish the best to your clients, hope they can pull out of this mess.
Excellent post. Absolutely incrediable that they would go back on their word. Have your sellers close their credit cards, and tell CW they don't have access anymore...
The first thing that crosses my mind is that I need to read your book and that all sellers facing a short sale should have you as their representative. These type of things are always sickening, but what can you expect. I enjoyed reading you dishing it back to that Countrywide rep over the phone, very enthralling.
I've heard some not so nice things about country wide. I have a friend that is trying to negotiate their loan. They just had some bad family news and layoffs. They will have not choice but to work with them if they want to prevent a future short sale or worse. I'm really hoping the cw sees the big picture here. Strong arming people isn't going to force them to pay if they just cant. They need to be more a part of the solution than the problem or they'll end up in a place they don't want to themselves.
Whew! I thought for a second there you were going to tell us the negotiator wanted the new child too!. Tell them to take the extra 5K out of the 25 Billion!
(I'm sure you will) Escalate this and get a reasonable person involved and reach a settlement. Pulling the credit so late & changing terms is sloppy at best. Looking forward to your book!
That is really frustrating although I guess I would expect such stupidity from Countrywide.
Unbelievable. That is about all that I can say.
I've run into this not just with CHL, but numerous other lenders. I don't want my tax dollars going to these unethical lenders!
Brutal, just brutal...
Sean D.
It does not surprise me.. . . . but it does disgust me. All these comment are right on and Countrywide needs to be exposed. I am about to undergo my first countrywide short sale and am now very apprehensive to move forward. It is a shame when we as professionals have to think in the back of our minds "maybe my client should just walk away".
I'll watch for the book!
At a recent 3 hour CE class here in Montana about short sales the attorney who was teaching it gave us the best advice ever, right from the start of the class: If you can avoid a short-sale and list the house after foreclosure, do it. It'll be so much easier.
Quite the story, and not totally shocking the way some of these banks are acting right now.
That makes me so angry! I am pretty glad that I'm not the one having to deal with CW, because I think I'd lose it on the negotiator!
Countrywide is the worst in the business. They hit me on my credit report. I had a loan modification approved on my personal residence and an amount of 8500/ was added to my principal amount in lieu of payment for Nov and Dec 2008. I had already made my payment for Nov and was told by a CW rep that I don't need to send in my payments till Feb 09.I asked her 5 times before I hung up.Then I start getting calls from them on a late payment on Dec !! To my shock I called and they had no clue that loan mod had been approved. I am furious because I do not want any negatives to be posted on my credit report, and CW assures me it won't be posted. And today I get an email from Experian that they posted the late payment on my credit !! When I call them to have it removed, they tell me that their systems are down and I should call back another day !! I could use a lot of nasty abuses for them, but I am being considerate of other readers !
I am not surprised. I was working pre-foreclosures and short sales almost ten years ago. There will be many stories like this in 2009. I am glad the seller has an agent like you on their side.
Nothing surprises me anymore! I think we can expect never ending changes for many months to come.
Elizabeth you are right it is like a Dilbert Cartoon. These kind of stories never cease to amaze me. Actually why should any of it be any surprise...the banking industry is littered with people that don't know how to make a prudent business decision.
Elizabeth
Doesn't surprise me. It was not that long ago that I sold a short sale and put it together for 270K. CW sent another appraiser through that was like brand new and he said it would sell all day long at 400K.
CW would not listen. I saw it go somewhere else and noticed it closed a long time after for $230K.
I am still shaking my head.
Tom
Elizabeth, That's really getting down and dirty. CW is probably also asking themselves why they no longer have a good reputation...if they ever did have one.
They are getting vicious and this story is getting all too familiar. They will not even listen to people that are current on their payments and have 30 year fixed. The interest only and 6 month behind will be taken care of.
Instead of preventing more and honoring good behavior of payment, they are encouraging folks to go behind on payment or short sale. Bank of America is acquiring a terrible reputation with the acquisition of Countrywide
Unbelievable. Completely unbelievable, yet, I know you speak the truth. I don't understand it all, they need to get real. KM
The banks are acting just plain stupid. There may be a lot of miconceptions out there about shorts and loan mods, but the bottom line is that the banks are digging their graves... and they have now managed to get Congress to tie a rope around OUR waist while they do it.
Elizabeth, I am dealing with a similar situation as we speak with Countrywide and a neighbor of mine. It's actually the next installment in my new "Dear Amber" series. I hope they get nothing else from the bailout. Btw, I can't wait to purchase your new book when it comes out.
low life tactics. I am surprised they didn't try to take it from you also.
Yeah short sales with Countrywide are ALWAYS horrible, then again so are there REO's and any other dealings with them. They are the hardest to deal with/negotiate/think outside the box company I have ever experienced. They once took 9 months on one of my short sales, so long the market caught back up to what the property was worth, they "short saled" their default fees for 9 months. Good Luck, try a manager, call the banks and have them lower all their limits on the credit cards:) I'm sure with the mortgage lates on their credit they might not let them raise them up again. and remember to expect the worst when dealing with this company.
Elizabeth,
The stupidity is just amazing to me....!!!
I wanted to say you are kidding right... but I know you're not. Unreal. Like Tom above we had one with CW that in their opinion appraised for much higher than it never could. So they insisted the short sale was a no go. (shaking head). I have no idea how they got an appraisal to go 20K higher than any comps around! ~Rita
That is a really disturbing occurance, and consistent with my experience with Countrywide's negotiators. No wonder things are so screwed up. Contact your local congressperson with this story, Elizabeth. If our taxes are going to prop up that operation they ought to act with more compassion.
It's like they are the Mob.
If we take a stand an report this behavior to our Congressman. They woule think twice before given them money... What a waste of time and money... I have mortgage with Countrywide and then they took over greenpoint...Our 1st mortgage is with them and now the 2nd mortgage is with them... I would like for them to take roll over all the loan into one, but I'm not sure if they will work with me....
now, I know that they are out for BLOOD so they won't help....
You Go Girl! I have had these conversations with the so called negotiators... not sure how much training these people have had..but most of them ending up costing the banks more money from their ignorance.
Elizabeth - Where does the scum baggery stop? Ralph
Thanks for the heads-up. I'm currently working on a home that we will eventually be "short-sale"ing with Countrywide. I will be making sure that I totally stay on top of things.
Chris Ann.. can you hand me the bucket when you are done? There is a attorney in town who will send a letter to the Lender demanding a copy of the file to make sure that all the disclosures are correct from the original loan. He mentioned at a meeting recently that a Countrywide client had paperwork sent back from Countrywide that was obviously forged (name/signature misspelled). Looks like the lender was covering their rear so they would be in compliance. What were they thinking??? Once he identifies that there was not full disclosure.. it gives the client better leverage when negotiating. Just a thought! If they want to play hardball .. then play their game!
Again I find myself totally repulsed by Countrywide. Not that they are alone in the basket of lenders that I find doing that to me lately. I could tell you a very similar story about wellsfargo. The fact that these lenders have been given billions in "bailout" monies and refuse to work with people and do loan modifications just makes me sick to my stomach. Wonder how much more they will loose and need in bailout monies while this home goes into foreclosure and sits on the market...
Elizabeth,
This is the type of stuff that is so frustrating to me.
The government just guaranteed up to $200 billion of BofA (countrywide) assets with tax payer money - and yet these banks continue to stick it to the consumer.
The only thing the banks "owe" Americans is fairness, and this negotiation that you write about is far from fare.
Wow, Hot topic here!! Like many others I am Never suprised anymore by the antics of some lenders these days.
He who has the gold makes the rules...
This has never been more evident than it is today.
Hi Elizabeth, Sad story and my heart goes out to them ( and many more like them, I'm Sure ! ) . Maybe you could find an address for us of one of the federal regulators connected with the "TARP " program. Then, we AR folks could email our horror stories about what these lenders are really like !
Hmmm, why do I not sound shocked??? No comment. They are supposedly running a test with ARMLS to pre approve these to speed up the process. We will see if I can get mine pre-approved and at a reasonable price. I guess your scenario is better than another bank, whom I will not mention at this point as it is an ongoing issue, getting an appraisal in at 150k and then wanting to NET 155k....for the first only. I had to laugh and tell them if they give me the listing when they foreclose, I will raise the price to cover but if not, I will get one more full price offer and then I will cancel the listing if they don't accept it. Well I have one more full price offer in for about 3 months now and they are still trying to come to a decision. It is no wonder why buyers are afraid of short sale listings....
Simple....slow the foreclosures, reduce the current inventory and we will recover! Get these homes off the market that are over priced too. It is comical how some sellers think their home is worth so much more today than it truley is. I just yesterday declined to take a listing due to the seller thinking it was worth more than it will sell for. Sorry, I am not in business to collect listings.
I have had a negotiator tell me there are withdrawing their written approval 24 hours before closing because they only wanted to pay a total commission of 2% instead of 3%!!!!! UNBELIEVABLE!!! Fortunately I was working with a listing broker that knew what he was doing and called their bluff but there was definitely a cat fight at the end, and this after MONTHS of run-arounds.
Countrywide is wrong.
How is it that we as a public allowed these companies to become so large and ineffective? The waste many months and many thousands of dollars by prolonging approvals or not approving at all - buyers get tired of waiting as the market continues to plunge and yet the government is handing them money.
I wish there was a way to communicate their (banks) reckless business practices to the general public - we need a good healthy outrage to hold them in check!
I would like to read your book when it comes out, would you sign a copy for me Liz?
The comments have established that every agent has a story just like this, or feels this is an unfair situation for the homeowner. I agree with that ... now what is the solution going forward? We know that this is a hot issue for the new administration and Congress - but unless we tell them what's going on in Sacramento and so many other cities around the U.S., how can they effectively correct this situation?
I am just surprised that CW does not get it, even after getting their behinds in deep trouble and having to dole out billions in settled lawsuits. Looks like there are many more coming their way
You know what? Let Countrywide suffer by taking back another property resulting in further drop in stock.
If they want to worry more about the cash reserve total they now have to have instead of the loan balance, let them.
Second, further loss of loaning power.
If they are going to act like this, they will have to suffer.
Jon Z. - I would love to find an attorney who would sue on behalf of the borrower in cases when the borrower suffers a greater loss because the lender wouldn't accept a better (better than foreclosure) offer.
Carrington Mortgage turned down $180k cash on a $200k BPO - this wan't some flunky I was dealing with, this was supposedly the VP of Loss Mit - by the way, the $200k was inflated; this buyer just really wanted this house. The following summer, as our market continued to decline, Carrington turned down 3 more offers - $155 cash, $155 w/ financing & $165 w financing, counter each at $190k. Again based on an inflated BPO.
We are just waiting for the sale now - I would bet BIG money that when it comes back out as a REO it will be listed in the $140 range.
Carrington told me that they had just received 20 billion, and the exact words were "it's our bat, our ball, our game; we can afford to take the house back"
How's them apples?
Just a quick comment to make sure we are all getting this right.
You say - "There is no personal liability on purchase money loans under a trustee's sale," I said.
I believe that is the rule for California, but many states do allow for personal liability after a foreclosure. I am not trying to be picky, but I am concerned that people in other states will read your post (which is excellent) and try to apply that rule in their home state and it may not be true there.
Thanks - Steve
I am in the middle of one right now with CW and have NEVER been able to SPEAK with any negotiater. They never call you back. All I get is that darn automated telephone system and I am just about ready to give up!!!
This is awful! Yet pretty typical of Countrywide. I wouldn't put someone in a Countrywide loan if they were the only company in town.
Hi Elizabeth - oh this story just makes me sick to my stomach to read. Those sellers have worked so hard to have those great credit scores and the mortgage company wants to stick it to them because of that?? How horrible, on top of everything else they've gone through.
I just do not understand the thinking going on with these mortgage companies/banks - instead of doing loan modifications for the sellers to allow them to have lower payments that they can pay, they'd rather force short-sales and foreclosures, which cost those mortgage companies/banks plenty. Why on earth doesn't Congress pay attention to that? Instead of doling out more money to them, why not foist some real consumer-oriented guidelines on them to help stave off all the bleeding going on?
Good grief!
Ann
Elizabeth - thank you for sharing this. Why am I not so shocked at this behavior. The system is a mess and not getting better. Seems that tons of money is going out but nothing good is resulting from it, unless I am missing something. With more of these distress sales coming, I see things potentially getting even worse, not better. A negative view? MAybe, but guess I need to see something that will change mind.
That said, I will continue to do the best I can to help buyers find the right home and navigate the muddy waters of short sales.
Jeff
Elizabeth - Great post - Thanks for sharing. It is called greed. They were lucky to have you as an agent. I am sure we will be seeing more law suits with all this messy short sales. I also think this story should be told on the news. You have a book coming out - keep me posted.
This makes you sick. Is Countrywide getting any help in the bailout - I hope not, I hope they can find a way to get the help to the individuals like your clients who need it.
Why doesn't this surprise me? I've heard it all. I've closed a ton of short sales in the last year. Countrywide used to be decent to deal with but they are getting worse every day. I just had one that Countrywide was insisting 16k from sellers . In fact, on this one the credit reports and bank statements show they have no money and no means to pay this. They'll foreclose.
Here's a direct quote on another Countrywide short sale I'm dealing with now when I asked the 'closer' a question about the per diem:
"Catherine,
Please review line number 12 on the approval letter. It clearly states that if an extension is granted the buyers/sellers will be responsible for a per diem.
Please advise if you want to cancel this file over the $70.88 total per diem charge.
Nina xxxxxx
SPO Workout Negotiator II"
So as you can see Countrywide went right to defensive on a question about per diem and made it clear THEY WOULD FORECLOSE over 70.88. Nice huh?
I have really enjoyed reading all the comments- I have nothing to add. I am outraged, and I think we will all remain that way, until Congress sets strict and enforceable guidelines for the "bottom feeders". I'm looking forward to reading your book. Thanks, Elizabeth.
You have had a lot of comments on this post -- great post.
I just had a horrible experience dealing with Countrywide on a short sale listing of mine. They took forever to assign a negotiator and then changed the negotiator multiple times. When I called in to the LM Dept I was not allowed to speak directly with the negotiator, whoever answered the call looked up notes on the computer. Each time the negotiator changed, they lost all the documentation that the seller and I had sent in. We had 2 contracts on the property (one very good and one so-so).
Suffice it to say, the seller finally gave up on the whole thing and turned their deed over in lieu of foreclosure after a pipe burst in the home and caused thousands of dollars of damage.
1st mortgage was with Countrywide and 2nd was with Bank of America. Talk about a double whammy!
Also, how many people know that Bank of America is not owned by Americans? That's right! The American taxpayers have "bailed out" a French-owned company. Wonder how many other banks are foreign owned?
The really sad thing is that insisting upon the homeowners tapping their credit cards for the lump sum payment is what will lead us into our NEXT crisis - The Credit Crisis". That one's not far behind most likely!
Elizabeth, Now I have to go find a HAPPY blog. This one makes me sick. I appreciate your writing it here but what is happening in our country when these things go on. I can only hope your sellers find a better situation now. Good luck to you and to them.
I just did an REO deal with Countrywide for my buyers and it wasn't so bad. But short sales are a whole different story and they love to change things at the last minute. Best you can do is make your clients aware of this and do your best.
Hi Elizabeth!
What a great blog post!!! I find it hilarious that a company that exploited loose financial leverage ratios would (of course) expect others to leverage themselves as much as they or other mortgage lenders have!! Of course, it's to be expected. If I'm generally risky with my money lending and then lend to you, then I would expect you do to the same in order to pay me. The sellers, however, didn't get behind on payments because they were risky (or a risky loan for Countrywide, per se)... they had life and medical problems happen to them. Dictating greater indebtedness from them sounds foolish on the part of Countrywide to me, but then, Countrywide probably doesn't think so. Instead I suspect the tune is "Business is business! This is why in business it seems that the lowest common [moral] denominator is accepted (except for those companies who keep morality/social stewardship duty in mind).
I look forward to your book! Sounds like your sellers have the RIGHT agent. =)
Elizabeth, as a lender of 30 years, I am not surprised at all about Countrywide and it's practices. They are part of the problem, and now they continue to take advantage of its borrowers. To answer your question, no way, bail out with our government backing these types of lenders, not from my wallet.
I wrote a post a few weeks ago asking where is the money for these people who really need the chance to keep their homes. Thanks for sharing this post, it makes me sick to hear of these practices. I would go back and ask for the site manager of this underwriter who backed out of this transaction. Just who approved them to pull a credit bureau on the sellers anyway? They already knew the mortgage was late, I think you could push this issue too.
Take care, Bob
Great post, it is said that CW is taking advantage of these borrowers this way. We are currently working a shot sale with CW and after this post I won't be surprized if they pull some crap at some point and time. They have aready ordered two BPO'S which leads me to belive the first one was probly the real market value of the property.
Well as for your clients I wish them the best of luck!
Laura,
OK now lets talk about you after we take every ounce out of the seller lets reduce the fees to the agents a bit so they can't make their house payments and then we can have another home in foreclosure. Not logic and certainly no sympathy for sellers that have been put in a very difficult situation.
Hi Elizabeth~ So they punish those that have good credit while they are at it, sound a little backwards to me! Let me know when your book comes out.....
Good post and highly rewarded with a feature. I find Countrywide has too many people and none of them know what the other one is doing. I handle some of their foreclosures and am having a horrid time trying to figure out who is in charge of what.
You did a great job of representing your sellers. I feel so badly for them. One thing, being that I started in real estate in 1991 I remember when Countrywide only did A paper loans. They were the pickiest lender we had. I'm not sure when that changed but just thought you might find that interesting.
I have not been impressed with CW in my normal transactions, but this absolutely defies common sense and business 101, let alone everything else you said.
I'm just shocked at this story! I was just talking this morning to a fellow agent who is trying to close on a short sale with Countrywide as the lender. I'll be sure to forward this to her. Best of luck to you and your clients!
This is a ridiculous scenario-- we have heard , and experienced similar crazy things with this lender.
I have never referred a client to Countrywide and never will. They are one of the worst lenders out there. I tell all of my clients to steer clear of them and deal with other lenders. I'm sorry they were bought up by Bank of American. Next to them I add WAMU. Both of these companies need to be closed down forever! Scum of the earth.
I do think that every single agent dealing with CW and getting the run around that they give should be sending details to their Congressmen and women and US Senators pronto. Unless they see first hand what crap is being handed out by Countrywide, and the others doing the same thing, we can't get it stopped. The easiest way to do this is to send a link of this post and all of the comments to our Congress and let the s**t hit the fan.
This is one of the most dispicable new developments in Short Sales that I have heard.
How that LM can sleep is beyond me.
... what a disgrace.
It's phenomenally ridiculous that those taking preemptive steps to avoid defaulting on bills, struggling to avoid bankruptcy are ignored by their banks. They want nothing to do with you until you haven't paid for months and have ruined your credit. I had a friend whose leased car payment just became too much and contacted the lender to modify her loan and they told her flat out, "There is nothing we will do for you until you've missed 4 payments." WHAT?! She was trying to be a responsible consumer but they didn't want anything to do with her until she was so much in debt she couldn't pay anything. So, she drove the leased car to the dealership dropped off the keys and paperwork for the car and left it there.
It's infuriating!
It's no wonder these lenders are in the situation they're in.
Disgusting. I forwarded this to my congressional delegation!
Hi Elizabeth...The more people in the real estate industry and the general public know about the behaviour of some of these companies the better off we will be when this is over, hopefully.
If these companies are still around we need to remember and remind others of what took place when people were down and out.
Kate
P.S. Your book will not hit the stands too soon for me.
I think the government should do some predatory bailouts to the predatory lenders! If they want to play hardball the government should do the same with them! Not that that will ever happen...oh well
Elizabeth—What Countrywide did is llegal! It is the same as "bait and switch" which is also illegal. A deal is a deal... they can't change it in mid-stream! CW needs to be informed they will be sued for breach of contract... this is what you have to do to get their attention. I'm a loss mitigator and what you are describing is worse than reprehensible, but it can be rectified. Everyone involved in short sales needs to join together and report these cases, as suggested above, to our leaders in Washington, our states and municipalities to set the record straight once and for all.
Elizabeth, as Sara and others have said, your Sellers definitely have the right agent. It is unconscionable that the bank wouldn't look at their circumstances when making such greedy demands. These are not people who lied about their income to get a bigger house, they had genuine life issues. I like the suggestion of Team Newington about getting an attorney to demand their file. I'm going to rememer that one! Just goes to show my dad was right when he said that banks new nothing about finance.
As for any persoanl liability, after a short sale or foreclosure, are you addressing the tax issue (capitol gains tax)? If so, there's federal legislation that was passed in December 2007 which releases (forgives) the home owner of this tax for such transactions occuring from Dec 2007 through 2009.
Linda,
Is what CountryWide did illegal? The written "approval" I got from them on the deal I did several months ago had a clause in it that said something like, "this approval is subject to management approval upon final HUD". That is not really an approval at all and leaves the door wide open for their "management" (aka negotiator) to make any additional changes they want doesn't it?
I don't agree with it, I am just trying to see if I am missing something - the whole stinking process is flawed, it's one lucky fumble after another if you get these dumb things closed successfully.
Linda, the fed mortgage debt relief act helps some people, under certain circumstances with tax on the INCOME of their foregiven debt and is not the same as capital gains. but that act also has been extended thru 2012. People should always consult with a CPA on these issues.
That is horrible Elizabeth,
Whenever someone changes terms it's bad, but come on!
Good Luck!
Tiffany, I have to agree.. .most short sale approval letters are very very vague at best and leave a lot left open for them to "change their mind" , or change the terms. Frankly, right now these banks are doing whatever they want , at the expense of their own clients. There is no benefit in "trying to do the right thing" in many cases except for those who are moral and ethical themselves, as the banks certainly aren't in the least bit concerned of how their decisions impact anyone but their bottom line. It saddens me when clients think these banks are here to help them. Folks, these banks are not our friends, and most especially they are not the friends of our/their clients. They are almost all now reserving their rights to collect, and in some cases have started collection proceedings within a month of closing a short sale. I wish I could say Countrywide is alone. But they aren't... there aren't any of these banks looking to "help the consumer."
Oh, my goodness, I am overwhelmed by the number of comments and outpouring of support for these borrowers. I woke up almost every hour last night fretting about this because it's so ghastly and abominable. It's entirely possible that the negotiator came up with the solution to tap the credit cards all on her own, perhaps hoping for a promotion, recognition or maybe just trying to hold on to her job during this housing crisis and mortgage meltdown. Still, it left me with a sick feeling in my stomach.
It also made me wonder what would have happened in a situation where the listing agent was more concerned with her commission -- and I hate to say this, but some are, or they are too inexperienced at dealing with short sales to fight back -- and tried to pressure the sellers into accepting such a horrible deal?
The upside is my associate reports Countrywide understands the sellers cannot and will not tap their credit cards to give it cash. She has negotiated a compromise. The sellers will pay $2,500 cash (which they will borrow from family), the buyer will pay $2,500 in cash (by increasing the sales price and, ultimately the mortgage, and the sellers will give Countrywide an unsecured promissory note for $10,000, bearing no interest, payable $84 a month and due in 10 years.
But it ain't over until the fat lady sings, and until Countrywide signs off on the HUD-1 at closing and the deal records, anything can happen, including a low appraisal from the buyer's lender. I will post an update if and when this file closes.
Wow, what a great post... it is crazy out there ! Will look foward to the book. I am a little upset as we have been waiting on a banks response now for over 2 weeks and may lose the buyer !
Elizabeth I am involved with a short sale that I turned into Greenpoint 4-5 weeks before it was sold to Countrywide, now we have to start all over again and they act like they could care less. I think Countrywide is going to end up owning alot of houses and the REO's can sell them dirt cheap, maybe they will wake up and see they should get off there buns and try and HELP us get some of these homes sold.
Elizabety,
Please forward this information to your Congress people. In fact, everyone who can document outrageous behavior on the part of these lenders please do the same.
Nothing will change if we just complain to each other
This is part of the reason why I hate dealing with short sales on the buyers side as well. The rest of the reasons are I really hate seeing my clients getting jerked around by the bank when we can go out and find just as good a deal elsewhere that is not a short sale.
To me Sort Sales are just a good opportunity to lose your buyers out of frustration.
Good luck to you...I am simply stunned at how low this company and other companies are going...my goodness. This type of blantant abuse must be stopped. Regards-Kathleen G
Great post Elizabeth...
Countrywide is the worst lender in the business. They rip off their customers every chance they get. I was just sent a copy of a new lawsuit pending here in Seattle between Countrywide vs the plaintiffs for overcharging and skimming profits on appraisal orders. They've been doing this for years through LandSafe, their appraisal management company.
And last June, one of my real estate clients sold their house in CA and had a prepayment penalty of over $11,000 that they were not aware of, and could not close the sale of their house until they agreed to pay it. They really had no choice, as they were in the moving van driving to Washington to their new home. It was horrible, as they had to modify their new loan at the last minute, as they now did not have the full 20% down payment for their new loan. Thankfully their new loan was not with Countrywide.
When are they going to get shut down for their corrupt practices? They are harming good, hard-working people and are a scourge on the industry. It's lenders like Countrywide that got us into the financial mess, and we still keep bailing them out.
It makes me sick...
Marti Winkler, North Coast Appraisal Service, Sequim WA
This is exactly why I stooped using them several years ago when they would talk cleints into a second mortgage using the tax deduction as the carrot. Guess who would end up with a second a high rate.
Wow, Elizabeth, this was an eye opener. I'm bookmarking to come back to read the comments. Please keep us updated on the situation AND your book!
Countrywide is EVIL. A few years ago my sister was 1 1/2 months behind on her mortgage one time. About six months after that happened she received a noticed that she was being foreclosed upon. She was not behind in her payments. She called to tell them she was current, sent them faxes of her payments and showed them that they were deposited by Countrywide. Unfortunately there departments do not communicate with each other. My sister had to go to legal aide for help. The judge threw out the case becasue she had proof of payment and keep records of all the people she called and all the faxes she made to Countrywide. Case closed. NO. Countrywide repeatedly took her to court, 4 times in 2 years. The last instance my sister represented herself. After she presented her case the judge recommended she sue the accounting department of Countrywide for punitive damages. Mysteriously that was the last time they tried to steal her house from her. She would sit in court and told me that if the defendant did not show up the lender would win by default. How many people have lost their homes to the deceptive and EVIL practices, preying upon the public who is largely unaware of their rights. Shame on you Countrywide. You will be answering to someone one day.
Elizabeth, I am horrified, where is the compassion. You need to email this to your Congressman and Senators. This is why America is against the bailouts. Over 350 billion spent already and nothing to help the average Joe out. I had a similiar situation with a young couple this summer, he lost his job, they asked to modify, the bank said NO. They lost their dream home in foreclosure, ruined their credit and are now renting.
Of couse we know the banks have no heart.
Citi Mortgage keeps changing the rules on a short sale I am working now. Everytime I speak to the rep, she tells me something different. The banks need to figure out the rules they are going to play by and stick to them.
Missy: There is no compassion, and I'm not expecting banks to have compassion. Compassion is for living, breathing, caring human beings. But I do expect banks to apply sound logic to their business practices and not be hateful.
I haven't followed exactly how slimy Countrywide has become but this puts it in a very clear perspective! Good for you, for knowing exactly what they could or could not get away with. And this shows exactly how stupid Countrywide is, for deciding to LOSE more money. Ugh. We seem to have an excess of stupidity lately.
They are not stupid they are extremely smart. The Govt is bailing out these jerks and they also get tax breaks on the losses they incur on the foreclosures.They are making good use of all the sweeteners the govt has put on their plates and this goes for most lenders
What do you know about "loan forensics"? Go back and look at the original loan documents for mistakes, get a real estate lawyer if you need to. If you find mistakes, get the lawyer to write a letter addressing the issue & send it to the negotiator with a CC to the Federal Trade Commission office of comptroller I think it is. Countrywide likes to either play dumb or hardball or both, try hardball back at em. Sounds like diplomacy is a lost cause at this point for that one. I have not had to use this tactic yet, but I hear it sometimes works as a last ditch effort. What do you know about it?
What a horror. Just when we get to a point where we think there's help on the way....CW come's in with another hacksaw. Can't we send them this blog and lobby against them....no, I'm not Pollyanna...just wish there was such a thing!!! Robin
I just sent a letter to Oprah and sent this URL with it. Somebody needs to let the public know what's going on...
This is the second short sale horror story that I have read this evening on AR! I think I am going to start a book about why I don't do SHORT SALES!
Elizabeth, wow! No wonderful CW is considered a bottom feeder. Amazing and ridiculous! Congratulations on your feature! ;-)
Elizabeth, absolutely outrageous! People who try to do their best and honor their obligations even when they face adversity get penalized by being too good, too honorable .... this is despicable behavior! As I say: they control the controllable...please keep us updated....Bo
This makes me sick! I want my bailout money back. I also want my clients not to offer on any more countrywide shortsales.
marcy
As for the question "Should we give it to them?" I give the same answer that I gave my congressman the first time. (NO).
Our taxes bail them out and they act like that. (?) I will save my money thank you.
Elizabeth - I heard about this today, and was going to blog about it. But you've done a far finer job of it than I could. When I hear news like this, I know that REALITY has gotten into serious MISCHIEF! Some of our financial giants need some serious whuppings.
This is becoming more and more common, as people are losing jobs. The banks do not deserve the money and that it was given with no guidelines for the use. I say we do not release the second half and give it to the people.
No - the government should not give the money to the banks. The government should give the money to the homeowner - and then the homeowner's problems will be solved. It is a mess - and we will get through it. I am looking foward to your book. Thanks for a great article. I enjoyed reading it - minus the bitter reality of what it going on in the market today.
Elizabeth, Countrywide is also sending all their preshortsales to India and doing BPO's before prior to offers, this is really bad because then if time goes by before you get an offer, the market goes down, sales close for less, and CW will hold to that original BPO which will be old by that time. You have to wait 90 days for a new BPO.
But it is NOT always CW, they are just the servicer in many cases. We have one that had been going on for over a year but Etrade holds the second note and will not allow a lien release without 6500 in cash from the seller. The seller has 2500 we are pitching in 500 and the buyer agent too. The first finally said 3000K OK to Etrade, but by then we lost the buyer, now the price has gone down and we have to start all over again. We discussed this with the VP at CW that we work with and she told us that CW does not have delegation powers from Etrade. Etrade calls the shots and CW can only carry out their orders.
I am writing a post about this one. Chase stopped doing promissory notes because the homeowners after signing the agreements never make a payment after closing. So if you have any HELOCS with Chase or investment property owners, they will have to accept a deficiency, ( FLORIDA is a deficiency state) or buy them off for 20 to 30% to get rid of the HELOC, no more promissory notes. I can't say I blame them.
I don't think the banks should have gotten a penny of bail out money. They would have made it just fine. Some would fail, then others would buy them and then life would go on. The bail out is NOT going to help us, the tax payer, the economy or the credit industry. Katerina
Elizabeth,
These are the types of stories that should be shared with our legislators. They're in a position to do something about these policies.
Rich
NO! NO! NO! NO! NO! and NO! We should not give them a dime!! I am so sick that BoA is getting our money for their bad acquisition choices. Countrywide was a leper which should have been avoided from the get-go and now BoA is paying a heavy, heavy price. Absolutely unbelievable!
Thank you for your post...I have a new listing where Countrywide is the second trust deed holder behind a Wells Fargo first and they stand to get nothing. I am expecting a battle. Do you think it will be any easier to work with them in second position? These are past clients of mine and have tried to get the loan modified with no luck.
Adriana
Adriana, they are a getting increasingly more difficult no matter what position. It will depend on what they'll take vs. what the 1st will let go. I would start with offering them 5k personally... that seems lately the minimum they'll even look at (it used to be 3k). But remember, unless this was a purchase money type 2nd, they don't stand to get nothing. They can very easily retain their right to sue your client later... so they won't get nothing... they won't let your client out that easily. Even if your first forecloses... the 2nd didn't and will retain their right to sue. Good luck. But your clients should probably also consult with an attorney pronto.
Elizabeth, you are soooo my kind of girl and I will be purchasing your book! Your persistance and personal responsibility towards your clients is just my cup of tea...if I were young enough you would have me doing this!
Way to Go!
Elizabeth: It is a shame and should be a crime for CW/BOA to back peddle after the approval. I'm looking to reading your book !
We have dealt with them as well. They are the bottom feeders below the bottom feeders. NASTY. And, MEAN. Look forward to the book.
Elizabeth-Way to go sticking up for your clients. That CEO Mozillo looked like a lizard to me. I also think that the asset management companies expect too much up front from the listing agents for utilities, appraisals, etc. Tightwads, what do they think? Agents are strapped for cash as are mortgagees.
I too want to buy your book! I also want to add my sympathy and anger to the mix.
What the heck is going on?
Remember, deficency laws are a "state by State" thing! Everyone should make sure they know what's up in their own area.
Sorry for you customers and best of luck!
Thank you for standing up to Countrywide. Your clients must be shell shocked. I know they are thankful to have you as their advocate.
And good for you on your book. It's already popular!
The curse of the Chinese, "May you live in interesting times." This is nuts what they are doing. It's a minefield negotiating.
One Word ~ Unbelievable!
Elizabeth, another great example of the short-sightedness of these banks! Don't work with responsible home owners who are down on their luck, bleed them a bit more. Thanks for sharing this story.
I have been working with Countrywide for almost 1 year on a short-sale. Their business practices make no sense and it's no wonder they are in such bad shape.
They are disgusting! This will come back to bite them at some point in time. Thanks for the heads-up.
Ugh! I cannot believe CW approved it, then reversed their decision!
Hi Katerina: I am seeing more seconds demanding higher amounts, too. Until recently, most were satisfied with $1,000 and would go away because they knew they had no equity. Now, even without equity, they want $3,000 or more.
These poor sellers have had enough tragedy in their lives: the miscarriage, health problems, job loss, mother with cancer, their home is upside down . . . they had no choice but to move out of town to be near family and try to start over elsewhere. If Countrywide doesn't accept their short sale, the sellers are in no position to make up the back payments or save their home from foreclosure. Some people think everybody in a short sale situation got there by their own volition, and that's just not true.
I'd like to thank you, again, Katerina, for contributing to my short sale book, and all the other Active Rain bloggers who submitted their stories. I can see I need to do a blog thanking all of you individually and promise to do so soon. None of us is an island.
Countrywide & BOA were a good fit. If you've ever tried to sell a foreclosure or short working w/BOA they are some of the worst offenders as far as getting any kind of response. It's like collectively, they don't care about the money it's all about their process. Then countrywide comes up with this extortionate plan. They also spend more money sending it back and forth to different negotiators and departments and getting new credit reports than they will make even if they get all their requests granted. Maybe there will be some relief on the horizon after next week.
Every year we must marshall our forces and our dollars (REPAC) to keep banks out of the Real Estate Business.
Your experience can be added to the thousands of reasons why.
It's always all about them.
could we just forward this entire article to our congressman, senators? if we get Senator Coleman back in Minnesota, he has responded to every e mail i have ever sent him, with thoughtful consideration..which i never expected...he may be rare, but there must be more of him out there listening
Hi Victoria: And if you get Al Franken as governor, the odds of support will increase ten-fold. :)
You have a cruel streak!(:
CW will lose much more then $5,000 by the time it goes to foreclosure and put back up for sale... and sell for probably less then what they can get today.
Sadly... it was just announced that B of A is getting another $20 Billion of the Bailout money to continue....
What kind of country have we become when we reward bad business practices?
Lets look at this from a different angle. If it only took $5000 to release the buyer from several hundreds of thousands more liability WHY wouldn't they do it?
Especially if Countrywide agrees to lessen the ding on their credit scores?
To have the peace of mind that it is over, to me, would be worth it. A hard money lesson to be sure.
Just know that several lenders are coming back after judgment to try to recoup their losses.....
On the other hand I am getting to ready to blog about the insanity and irresponsible tactics in re: to Countrywide taking weeks to assign a negotiator, while housing prices keep falling, and then take another 31 days to make a decision as the buyer walks........
I do agree there are truly hardship cases where even a hundred bucks would be hard for these people to come up with.
Most of us are saying the same thing---We kept bailing these businesses out But they have Yet to help anyone but themselves. It really sad that they have no real measure of accountablilty as well!
There is a long list of things that they should not be doing! However, they continue to do them.
This is really a mess.
Chase bank is now taking at Least 60 day for all home loans.
Things will get better, if we could just work together! (too bad some of the banks are not wising up)
Take Care & Fly High In '09!!
This is just plain ridiculous. It's like the banks operate under NO LOGIC at all.
Elizabeth, Nice job. Unbelievable that they would even consider requesting that this couple use a cash advance on their credit card. However I quess anything is believable now a days. That does really stink for those people. I would also like to know when your book is out so that I can read it.
Wow that is just crazy!!! I love your reply to the negotiator: ""You know what? They aren't going to pay February, March, April, May, June, July or August, either,"
That's just Awesome!
It is no wonder some banks/lenders are failing . . . they have worked themselves into failure and it is their fault. The bureacracy is hip deep in BOA and I'm sure Countrywide also. They want the American taxpayer to bail them out . . . and one and one-half months later, then want more money. I don't know of one taxpayer that wants that to happen, but our elected representatives appear to be working for someone other than the American Taxpayer.
This story just boggles the mind. No wonder so many agents avoid Countrywide short sale listings.
Turns out you were right, Countrywide (read Bank of America) was just given even more of our taxpayer dollars. Now they really won't have a reason to negotiate.
I would like to know how this ends up for this couple. Do they pony up with the extra cash or walk away?
Elizabeth:
Reminds me of a personal experience with CountryWide a few years ago. When interest rates were going down they called me and told that because I had an excellent credit record they could bring down my interest rate substantially. I saw the opportunity to refinance with them without too much hassle. I agreed and they sent me the paper work to be signed with the lower interest rate. I had a hefty prepayment penalty that I assumed it was going to be waived since I stayed with them. When the time for signing loan documents came, I noticed in the HUD1 the prepayment penalty. I spoke with the Loan Officer and told him I was not paying a prepayment penalty. The loan officer informed me they could not waive the $ 17,000 prepayment penalty. I told him I wanted to speak with his or her superior. The guy above him told me they could not waive the prepayment. Neither the one above him. I decided to exercise my right of rescission and I canceled the loan with them. They even called me to complaint that I had waisted their time. Their business ethics stank then and stink now. I never placed another loan with CountryWide after that.
Elizabeth, I haven't been able to read all the responses to your wonderful post. But, it was brought to my attention by my partner. I read Teri's post and I understand completely. We have dealt with Countrywide on a number of shorts. Unbelievable,the runaround they give an agent, let alone a broker. They have no incentive to get rid of properties. The worst of the worst, and the headaches and heartaches they are responsbiel for are amazing!
Isaac: Good for you for canceling. Many homeowners in your shoes would not because often they are too stressed out.
Jack: I believe they are giving Countywide an unsecured prom note for ten grand at zero interest, plus borrowing $2,500.
Hello Sabinske & Associates: I've done other short sales with Countrywide that went through smooth as silk. It all depends on the negotiator and how many negotiators you end up working with.
As you all know by now, Countrywide took over the Greenpoint loan o/a 11-14-2008.
I had 2 short sales with 2 siblings going at the same time with Greenpoint as the second and EMC as the first.
Both took just 4 months to get them assigned to a negotiator. EMC was fine at that point and their negotiators are tops. EMC issues approval letters and I was able to through 3 calls a day get Greenpoint to issue an approval just in time.
The second file wasn't so fortunate. Greenpoint provided their demand at $6700 for their 2nd and EMC with some resistance to the $6700 gave their approval and the escrow proceeded the funding. All during escrow I called Greenpoint 2-3-5 times a day and wrote daily to everybody I could at Greenpoint trying to get that approval. I was told the approval would be issued tomorrow a dozen times and then found out they transferred the file to Countrywide.
I contacted Countrywide every other day since the end of November. Resubmitted the packet several time despite their saying don't, sent the packet and e-mailed through friendly LM personnel several times and call daily to try to get the file assigned and approved.
3rd scheduling of Trustee sale is for the end of the month, and Countrywide still doesn't have it assigned, they now are asying it will take 90 days from assignment to get it approved. All this after I have sent and verbally advised them of the trustee sale and loss to their investor dozens of times.
And, NOBODY at Countrywide is able to even find contact info for the unit working on the Greenpoint liens. ALL they can do is just write another e-mail that gets ignored.
I am amazed that somebody thought Coutrywide could take on another 144,000 new files when they couldn't process their own in less than 120 days.
How can they expain to the investor that they just didnt' get the file set up in time and lost the last $6700? I came from a financial services background. I like to save banks money.
It amazes me that they can process a REO inside 2 weeks, but it takes them 4-6 months on a short sale where they lose less money.
Elizabeth - I wrote a post today at SabinskeAssociates regarding this same issue. You might want to check it out. We were "held up" as well. - Don.
Talking to EMC, they have had a number of files with this same issue, and it is just about whenever Countrywide decides to get to the file.
Unfortunately, the files are full of errors and their imaging dept (in India) creates more problems by putting documents in the wrong sections. So the short sale folks here stateside (likely to be soon outsourced to India) as stuck looking at pages of confusing images.
Of course, my conversation yesterday was with a so called loss mitigator that was looking at the listing agreement and despite correction, kept talking about it being the purchase agreement.
So.... we just keep calling.
Thanks for this information I am currently working on some short sales with Countrywide. I will be a long process talked to loss mitigation departmetn and current processing times are 85 business days.
I talked to a client today where the person (in India) insisted she call back on December 25th or the file would be closed. She kept trying to tell him that December 25th is Christmas but he continued to demand that she call on December 25th or else....
she finally said OK fine.
She called back after Christmas only to find the file had been closed.
You know, Wendy, when you are transferred to India, you can insist that you be transferred back to the U.S. Just say "transfer me back to the U.S." Little trick I learned from associate who hammers the banks all day.
Thank you Elizabeth for sharing. I also can say, been there, done that with CW. Little different situation, but what do you do when CW has a $130,000 Cash offer on the table for months (12/19/08 - 2/10/09), only for them to foreclose on the property and relist for $88,500 on 3/2/09 - Yes, actually happend. Idiots! And this is costing all of us money.
Well, Elizabeth, this post keeps coming up when new people comment! Guess what? We have a house on Fleming Island that I had CASH buyers for last summer with an offer of $640,000 with a loan balance of $715,000 - and the buyers would have negotiated - and the bank (not CW) used a BPO with comps 4 miles away in a golf community with tons of amenities - so we walked. So the house came back on the market a couple of weeks ago for $524,900. That's a loss of $115,100 in 7 months plus fees for the foreclosure. And why do banks think they should be in real estate? Just closed for $525,000.
I have one now with National City as a second. They want 10 % ( 5,500 ) to release the lien and another $ 4,500 to release the debt as well. 10 K on a 55K note .
The first lender ING will only pay $ 2,500 to the second and does not want to see the second get a penny more. National city wants the seller to pay 3,000 upfront for a lien release before they send a letter that states 2500 will be sufficient from ING .... but still want and another 4,500 for full settlement....
The seller was going to pay the $ 4,500 even tough he lost his job and moved to Europe last month to look for a job as the prospects here are grim. He has a divorce and a job loss as hardship yet he is being asked for unreasonable settlement cost. In light of all this he decided to just let the home foreclose then he will be protect from deficiency lawsuit. Everyone is loosing with that: is a loose loose situation but with 2 unreasonable lenders there is not much we can do.
Oh and it is ING that suggested he does a short sale when he was denied for a modification because he was current ( he still had a job until last month ) he doesn't now. I sent them the email where he said let it go to foreclosure we tried and in good faith negotiated the best we could but both lenders are unreasonable.
I always stress to the lenders that a short sale will bring them more $$$ and they can dispose of the home faster... is has been proven over and over again more loses are to be incurred by lenders that foreclose.
I tough ING was a reasonable lender, I got them an offer 5,000 over the market and the BPO value ( that i purposely negotiated higher ) so the cost that was going to be paid to the second is already built in the offer but NO they don't want to pay .... I also disclosed to them that National City needed a minimum of 10% to approve the short sale. and it was included in the HUD oh well , they can just get 30% less in 6 to 7 months from now if the are lucky.
And National City can get a big fat 0.
Yes and is true we all loose.. our neighborhoods, buyers that get fed up with waiting and decide to rent and not buy in this mess, and the agents that make 0 co mission after months of work.
Us bank, primary. Crediti union second. US bank gives me their net demand, CU is delightful and says we need nothing, help your client! We know the septic is bad, 10K fix. Priced accordingly. Great offer, fulfills net with money to spare, and enough to fix septic. Fannie Mae backed loan, no repairs! Come onnnnnnn. Enough to net everyone, even the CU $3000.00. Fannie and Freddie need to step up also.