My husband is the poor guy who gets to listen to me rant and whine about my business. That's primarily because the cats don't give a hoot when I share my day. To be honest, my husband doesn't really care, either, but at least he's smart enough to say, "That's too bad," rather than, "Here, let me help."
Working on short sales means every day I wake up and wonder: What new fresh hell is in store for me today?
Last night, I complained at great length about a Sacramento short sale with Countrywide, and my husband was forced to listen. He was probably thinking about whether we were out of eggs or low on cat litter, but he sat quietly on the sofa, muting the sound button on the TV remote. When I finished, he said, "That sounds like a blog." He's right.
Countrywide's short sale procedures change constantly. Over the past couple months, I've noticed Countrywide has been slipping a requirement into its short sale approval letters. Here is what that demand looks like:
The problem with this demand is it makes the title company responsible for reporting transfers to Countrywide. Title companies are not responsible for anything that happens after the close of escrow, so naturally, title company legal departments insist that Countrywide strike this item. In the past, Countrywide has removed this requirement. Now, Countrywide is saying no.
Title is refusing to issue title insurance, which means we won't close unless we find another title company that will. One would think that a title company could come up with a way to charge extra for this "after escrow service," and get on with business. Oy.
The Short Sale Savior, by Elizabeth Weintraub, coming June 2009.
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.
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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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Why would they care? are they concerned that an investor would flip this? and if they've already approved the sale...what business is it of theirs? Countrywide is the last bank that has any right to do anything.
I think #11 may be...
11. If the property value is increased in the next 5 years through any effort of the new buyer, economy or other means, Countrywide requires the sale of said property and will receive all proceeds up to the amount lost due to the short sale including but not limited to interest, principle, legal fees and other potential gains Countrywide imagines they could have made if they had the money now.
Well this is not all that bad. If a homeowner is closing, they are not going to sell. An investor can hold it for 30 days before they sell. Besides, there is no mortgage payment for a month so no loss to the investor.
Overall, Short Sales are a hard way to sell!! Unfortunately, in today's market, you have to do them.. i was hoping they would get easier instead of harder with some of the new bills being passed, but so far no such luck... i feel for you.. we go through the same type thing daily..
Well, you could refer all short sales to another agent and collect a referral fee. Best of both worlds without the headache. :0)
Wow more fun and games from countrywide. They are one of the worst to do a short sale with because of the constant changes. They are totally trying to discourage investors. In some cases investors are the only people willing to purchase the most damaged properties. How is this new rule helpful to the real estate recovery?
Countrywide wants to eliminate flippers. Its past demand letters requested notification within 180 days. The problem with this present situation is we appear to be at a standstill. And it's preventing the file from closing.
Elizabeth, sounds awful! And my cat's don't care either!
I'm sure they think this is logical and reasonable to add this clause but wouldn't you think Countrywide would have checked with title companies to see how it would affect the closings. Good luck.
Elizabeth,
I fully understand your frustrations with Countrywide, I was working on a Short Sale with them for 3 long months, waiting for a negotiater to be assigned in there loss mitigation department, when one was finally assigned, they asked me if the home was vacant, my response was "yes"... There response, we no longer negotiate secondary or vacation homes...this was not the situation with the homeowner, who relocated due to employment transfer. I will share with you though I have closed several short sales successfully, and banks are actually beginning to communicate better with agents so you know before you receive an offer what there bottom line is...the exception to this would of course be "Countrywide!"
Honestly when it comes to Countrywide I'm not surprised. They get more difficult as time goes on. I feel bad for the buyers who finally get that far in a shortsale to have it fall apart over something like that!
Guess I'll be looking for that neat little "addition" of a clause on my new approval letters that Countrywide has to generate because of a freaking CLERICAL error. When regular sales come around again, I don't think I'll know what to do with myself.
They seem to be one of the worst of the bunch. I think they are being ridiculous. What do they care is done with it? Are they P.O'd because they may not make as much as someone who goes in and fixes their mess up? Here they can't be flipped for at least 90 days and even if they did - so what. The banksselling the property -be done with it. but they seem to feel they have to have a hand in there somewhere. Probably their "process" became too smooth and had to find a hiccup to throw in there to screw it all up....lol- everyday is a new day with these short sales that's for sure!
Elizabeth,
My husband is in the same boat as yours. He learned to mute the TV, make eye contact and listen to my gripes. I think your idea at a solution makes sense. The title companies should charge for the service. I don't think it would take very long for Countrywide to abandon this requirement.
Sandy
Elizabeth - My husband has learned not to try to "fix" things, too. Sometimes, I just need to vent. :)
Elizabeth, from your area of expertise it seems the banks and lenders are making this whole short sale process more complicated as we keep moving forward. Wow, it is a wonder anyone EVER finally settles into a house after getting involved with this. Glad your husband listens to your glutton for punishment stories. If you want animals that care, you'll have to trade a cat or two in for a dog. At least they will be looking at you with their loving eyes listening or perhaps waiting for that dog biscuit you have concealed in your pocket! Great husbands like yours have learned to nod their head and just calmly say, "Yes dear!"
I think another reason behind this request is to make sure there isn't any fraud going on with the sale, such as the seller striking a side deal with a buyer to buy it back (in a relatives name or something) at a lower price. There are some slimy things going on out there.
Couldn't escrow record simultaneously, on Countrywide's behalf, a request for notification of deed recording? Can you check w/ your county and see if this is possible?
From a previous experience I had a totally bad taste left in my mouth from Countrywide anyway. I wonder how this would play out in Georgia?? as we have no escrows. Attorneys do the title work and property changes deeds on day of settlement... in fact Georgia really doesn't have mortgages we have property deeds and security deeds recorded together for properties where buyers gets a loan.
And suppose my husband and I buy a countrywide short sale and he died 3 days later... could I not record a deed of assent for 30 days.
I also have a problem with Countrywide demanding buyers prequalify through countrywide to look at an offer on a REO, what if I don't want anyone at countrywide to see my credit score... because I think they are a bunch of crooks.
This rule sounds insane. I'm glad your husband mutes the TV while you rant... mine turns it up.
And the nightmare from hell (short sales) continues it's bloodbath across America, Elizabeth. The arrogance and self-serving attitude is what bothers me the most, and coming from Countrywide, it's even more ridiculous! I agree with your utterance... oy vey...
I'm sorry, but I have to be a guy and provide a solution rather than let you rant!
Can your escrow company state that they will take on this responsibility? After all, the demand letter states that either title or escrow must notify Countrywide. Just have an ammended escrow instructions that state that escrow would do this and see if they releases title from performing a task.
I am a little concerned about the government bail outs given to investors who hold non-performing notes. I wonder if that is the reason why Laura Higgen was told that they no longer do short sales on 2nd and vacation homes. Maybe they will get paid anyway for the difference owed after the foreclosure?
How nice, your husband mutes the TV? Did you have to train him on this? I've only been married....8 yrs (had to think) and I don't get a tv mute yet!
I haven't had to deal with a short sale yet so I feel for you. Thanks for giving us all the heads up that Countrywide keeps adding things into the mix.
After a property closes it is closed. It would seem that they should have more on their mind that worrying about short sales that are already closed -- like closing some that have been on the books for months!
I'm waiting on a countrywide short sale approval as we speak. Ill watch for it. Thanks....
My husband is a smart man and a saint. I'm fortunate that he puts up with me. For most people, I'm probably a very demanding person to live with.
Countrywide's handling of short sales is insane. On one file, we have short sale approval, yet another department of Countrywide sent a rejection letter to the seller. And the approval arrived without demands for a promissory note, which was a requirement at one point. We're pushing to close on the short-sale approval before Countrywide figures out there is no prom note and, oh, btw, it was rejected. You can't make this stuff up.
I am going through this very nightmare of both issues- paragraph #10 and the rejection letter to the seller- let alone this sale has been ongoing since August 1, with one buyer walking away and the second one waiting 3 months. The selling price has gone down $40,000 while Countrywide dragged on- now we are so close and the approval letter has this paragraph and title company has refused to close- I called around and most of the title companies feel the same way. I basically have been marketing a home since May with a deal that will never close. You can't make this stuff up and want to just run away screaming.......
Hi Mary Jean: Well, the title company I'm working with has agreed to close. Since title isn't signing that approval letter, it is not really a party to that letter. And I have found other title companies that will accept it, so it's not a totally lost cause. The question that arises, though, is how is Countrywide going to enforce that paragraph? They most likely aren't. They can barely wipe their own butts.
Elizabeth - we have had our share of problems with Countrywide and short sales, but this was a new twist. We have one going right now with them and are nearing approval we believe. Sounds like you got this resolved; if we have a problem with the title company because of this, may I call you?
Paragraph 10 is not the problem. Most title underwriters have gotten around it as the demand letter is not an instruction to them. Further, it has potential for a RESPA and/or California Insurance Code 12404 violation if the title company tracks and reports transfers after close.
The real problem is a new paragraph where Countrywide refuses to reconvey the deed of trust and threatens to unwind the sale. No title company or their insurer will close over it for obvious reasons. The following is the new paragraph coming out of Countrywide:
"If the property was acquired by any means of fraud, Countrywide reserves the right to pursue any and all actions available to it to offset its losses. If it is determined that Seller(s) and/or Buyer(s) participate in any way to the fraud, this short sale will be void, and the Note and Security Instrument will remain in full force and effect."
I wonder what the Jerry Brown would say if he was given a few copies of these letters?
I have sent your email to my escrow officer and yes, she has seen one of those letters. Her title company will not insure for paragraph 16. There are ways around paragraph 10, but 16 is another story.
Thanks for writing about this.
These are attempts to scare people from perpetrating fraud. Which buying below market and selling at market is certainly not. #16 is a clause most likely designed to deter non arms length transactions.
If your seller is a corp and your buyer purchases the corp along with the property then there is no change on title and won't violate the approval letter.