I have to admit – even I was surprised at this one.  I’ve previously written about Bank of America’s handling (sometimes an interesting word choice) of short sales.  I’ve written about how they have foreclosed on homes – by continuing with their foreclosure process even after the home was successfully sold to a new buyer who did not have a loan with them.

Now they have foreclosed on a home in Spring Hill, Florida that they NEVER had a loan on – they simply had the wrong address.  Telling the company who handles Bank of America’s foreclosures (for $3,800 a house) that they had the wrong address changed nothing.  They went right ahead and foreclosed anyway.  Charlie and Maria Cordoso, the owners paid cash for the home and there was no lien with Bank of America.  Read all about it at tampabay.com.

In closing – and I really mean this – BofA is actually getting better (much better – but there was nowhere to go but up) at processing short sales.

Imagine being at your desk and getting a certified letter in the mail that says that you owe the lender you sold the loan to $417,000 because their was fraud found on the loan.  Come up with the $417,000 in three days or else we will close you down, sue you, revoke your license and find out where your kids go to school.

How about this…  Imagine if not only the mortgage people got this letter but the real estate agents started to get the letter and needed to come up with the money if a loan went bad.

Right now, without a massive pattern of fraud that is investigated by the FBI over a long period of time are real estate people held responsible.

It’s like a coach getting fired for his team being bad and the players keep getting paid millions (see the National Basketball Association) for years to come.

OK, fellow agents, how about it?  Willing to share the pain?

Maybe I should have titled this post, “Attention All Lawyers – Bank of America Has Lots of Free Money For You”.  What you are about to read might seem like something out of a Franz Kafka novel or a Salvador Dali painting that was somehow brought to life.  Only it is verified and real.

It is no secret in the real estate community what Bank of America does (and doesn’t do) regarding short sales.  In fact, typing, “short sales bank of america” into Google has this post right on the first page of Google.  Bank of America has routinely forced homeowners into foreclosure when a short sale was possible.  But when you read the next paragraph and get to the bottom of that paragraph – you will go back to the top and read it again because you will think you’ve misread it.  It just can’t say that.

In many instances – where a trustee’s sale has been postponed in order to complete a short sale – once the short sale is successfully completed and title transferred to the new owner – Bank of America then forecloses on the new owner.  Investors who have purchased the home at auction will then go the house, change the locks or in some cases break in to the home, thinking that the former owners simply haven’t moved out yet.

The following all happened in my office with my staff:

Apparently BofA has no system in place to cancel trustee sales after a short sale is completed. Our office is currently working on getting trustee sales canceled on 3 files that have closed escrow on a short sale with BofA recently. On one file we closed escrow 26^th of January. The trustee sale was scheduled for February 4^th and BofA would not discuss canceling the trustee sale until 2 days before it was scheduled. So on February the 1^st (and 2^nd, and 3^rd) we spent over 5 hours trying to get someone at BofA to cancel the trustee sale. In exasperation on the 3^rd day of this, we finally told them “go ahead and sell the house that you have no legal right to foreclose on and you can undo it after the fact”. At that point the supervisor urged us to calm down that they wanted to work it out and they couldn’t understand why no one was doing anything.

They told us that Recon Trust (their appointed trustee for sales) charges them $3800 per foreclosure and that they didn’t want to pay that to foreclose on a home that was already sold. We had already spoken to Recon Trust trying to provide copies of the HUD1 that showed the sale had been completed a week ago, but they will only take instruction from BofA (plus there is that $3800 per trustee sale – legit or not). So far we have gotten called off 2 of our 3 homes that are closed but still scheduled for a trustee sale. This has taken hours and hours of our time to get BofA to do a job that is theirs to do. Buyers are reporting notices of sales being posted, investors trying to break in and look at their homes, etc. all because the trustee sale is not halted. The only bank currently doing this to our knowledge is BofA.

Maybe someone from Bank of America reading this could alert someone in a position of authority to actually DO something about it?  I know a whole bunch of people who would be very grateful.

For his ground breaking book, “Good To Great“, Jim Collins and his research team looked into just about every public company in the United States to find those companies that made the transition from good to great.  Good is the enemy of great – which is why most companies and most people never make that leap.  They are good. They are not great.  To get on Jim Collins “great list” a company had to significantly outperform the other companies in that industry for  a minimum of fifteen years.  Making the great list wasn’t going to be a fluke.  Collins first wanted to isolate the companies, then study them to find out what the great companies all had in common – which is the subject of his book.  A very interesting part of his study was also the direct comparison company chosen that had the same opportunities as the great company – but did not make the leap.  Those companies were studied, as well – to find out what they had in common.

The good to great company that made the grade in banking was Wells Fargo.  The direct comparison bank – that had the same opportunities, but did not act upon them and did not move towards greatness – was Bank of America.

Currently, Wells Fargo is the very best bank to deal with for a short sale.  The very best.  The other banks that are factually as good as, if not better than Wells (Wachovia, World Savings) are owned by Wells Fargo!

I’ve written before about Bank of America.  When it comes to short sales, from an agent’s, buyer’s or seller’s perspective, B of A / Countrywide has been, and is still currently, the absolute worst lender in the United States to deal with – and pretty much everyone in the industry knows it.

Now the good news.  A month or so ago one of the most powerful and truly influential people in real estate, Dave Liniger assembled some top B of A executives and several United States Senators in the same room.  I think it is fantastic that Dave Liniger can contact them, tell them when and where he needs to see them and have them actually arrive.

Mr. Liniger proceeded to tell the B of A executives that their reputation – in the area of short sales was just awful.  He told them that he had about 100,000 agents with RE/Max and that he doubted very many of them would even consider directing loans to Bank of America.  He pointed out to them that if they had any hope of keeping their agent driven business they had better stop making enemies over in their short sale division.  The senators were a little surprised and dismayed at all the specifics Mr. Liniger pointed out had occurred with regard to loan modifications that never happened (after people were put on wait for six to nine months) and that the same thing was happening with short sales.

The Bank of America executives were shocked and said they had no idea such things were happening and (the good news) vowed to correct each and every one of types of behavior that Liniger had pointed out to them.  Dave Liniger is predicting that B of A short sales will soon be as easy to do as Wells Fargo short sales.

To be fair, B of A is already improving.  The loss mitigation companies they’ve hired to handle some of their short sales is not (repeat, is NOT) difficult to work with, at all.

I personally do not believe that B of A will ever consistently achieve the stellar results that Wells does.  The reason?   The executives were shocked at what Dave Liniger had to tell them – they didn’t already know.  A great executive would have not only known it was happening, they would have been able to predict it and prevent it from happening.  Great executives make it their business to know what is happening in their business.  That said, I still believe that B of A will make great strides and improve tremendously.  I want to add, I am grateful for Dave Liniger stepping up and to B of A’s top management for owning up.

Short Sales are only going to get easier!  So, THANK YOU!

I’ve personally written about B of A Short Sales before and so have many others.  I don’t know if this will get any real traction but below is an unedited (and unsolicited) email I received that was sent out to Realtors across the country.

It’s crazy. Agents are Bank of America’s biggest customer. But they treat us like dirt on short sales. It’s like we don’t matter to them at all. However, we do matter and a whole lot more than they realize. Did you know that their mortgage division is one of their largest profit generators? That means when you send them a buyer, you’re actually helping them make more money. Why are we helping them out by sending them our customers? 

Let’s simply stop sending them business. Hey, we all know they’re making money! They have enough in the bank to pay Ken Lewis seventy-one million in retirement bonuses. And now they’re paying out forty-five billion to the feds so they can hire on a new CEO. Maybe they could use that to hire on more staff to negotiate short sales. Nope! Getting a new CEO is more important than taking care of their most important customers.

Here’s the scary data. We all know that short sales save money. One study showed a 20% higher net on a short sale versus an REO. That’s a lot of money! On a $150,000 mortgage, that means a savings of $30,000. This is their Achilles heel But, they aren’t taking the losses personally. No wonder they don’t want to hire on more staff. But, it costs Uncle Sam. Let me explain.

I remember reading somewhere that 45% of BOA’s loans were owned by Uncle Sam, thru Freddie Mac or Fannie Mae. When we show the American Public that BOA is costing Uncle Sam and the taxpayers tons of money, they will be outraged. So, join me in telling them how we feel and help me get the word out on this atrocity. We can get them to hire on more staff and do a better job on the short sales. But, I need your help.

Go to my site, http://www.SSAgentAdvocate.com and sign up to stop sending your buyer’s loans to them. Do your part to help make short sales work so everyone benefits.

Sincerely,

Ben & Chris Curry – We work at KW in Gainesville, Florida

P.S. Don’t think BOA’s CEO, Ken Lewis, cares about agents. And don’t think that REOtrans is going to solve the problem either. No amount of technology is going to change the fundamental problem. They don’t have enough staff. How can negotiators even think straight when they’ve got 400 files on their desk? Would you?

REOtrans is like putting a band-aid on, when you lost your leg. Rather than take care of their most important customers, BOA think they have more important things to do. What do they consider more important than treating agents with respect? It’s paying their departing CEO seventy-one million in retirement pay and forty-five billion to the feds. Why don’t they use that money to improve their short sales?

If you think that’s outrageous, then pledge your help at http://www.SSAgentAdvocate.com .

P.P.S. Forward this e-mail to your friends. Let’s get everyone we know on board. Then, we can actually get them to change their policies. Here’s a story from one broker whose buyer got lied to by them.

“I just had the worst experience as a broker in the twenty years of selling RE. The local BOA prequalified a client of mine and gave her a prequal letter saying she was qualified for a $105,000 mortgage. I was concerned with her going to BOA  and was skeptical about them qualifying her because she had her own business and did not show a lot of income, but she had a good bit of money in their bank and I screwed up and trusted them. I tried to get her to check with another lender with no success.

Long story short,  after BOA made her pay off her car, transfer money out of CDs, having the loan processor go on vacation the day before closing without telling anyone. The final loan approval guy calls one week after the closing date to say that the Buyers ratios are over 30 points off!

I am not a mortgage broker but even I know that the first thing you check is credit and the second thing is Dept to income ratios.

The moron’s they have working for BOA allowed this poor lady to go through the expense and hassle of their loan process with Dept to income ratios that where nowhere close to being where they need to be.

They had the nerve to call her a week later to ask for a $400 fee they say she owes them for the loan process. Worst experience with a lender in 20 YEARS!” Paul. 

Pledge to stop your sending your buyer loans to them here http://www.SSAgentAdvocate.com .

Sent By: Ben & Chris Curry P.O. Box 2287, Lake City FL 32056.

If you found the above viewpoint interesting – look for my next post on the subject of Bank of America and short sales.  I think you are going to love it!

A porcupine with a bad head cold taking excessive amounts of tranquilizers after watching a 24 hour marathon of Beavis and Butthead episodes could have figured out that keeping interest rates low was a good thing to do recently.

Then again, Big Ben learned from the person who really caused this mess and that is his predecessor, Big Al Greenspan.

Bailout Ben, as he may get to be known in the future, does not deserve the chance to continue.  It’s time for new leadership that comes from outside of the inside of the financial world and government as we know it.

Al and his briefcase, that probably had a baloney sandwich in it, kept rates very high earlier in the decade and then did not see the regulations that needed to be put into place to keep the economy real late in his term.

He just kept his smugness going after knowing that he could control stock prices by his irrational exuberance quote.

From then on, he thought he was more important than Jesus (sorry, John Lennon).

We will look back on this decade as a time that we were lucky we didn’t get into trouble earlier but hopefully, we can get out of it and return people to work, have them buy homes and give them logical loans.

BTW, It’s been written that Greespam (not a misspelling) actually had an Option Arm on his house. Makes you wonder.

133 banks have already failed this year, and there’s no evidence to suggest the 134th is far away. The FDIC keeps a tight lip on the health of the nation’s 8,300 banks. So a website run by MSNBC and American University helps to check the status of your your bank. BankTracker for banks or credit unions offers a large US map, making them easy to find. Or just type the name in their search bar and look at the troubled-asset ratio. The BankTracker site says:

While it is not an official FDIC statistic, nor is it intended as a definitive predictor of the likelihood of bank failure, the troubled asset ratio apparently is a strong indicator of severe stress inside a bank because it shows the bank’s ability to withstand loan losses. Of the 92 banks that have failed so far this year, 84 had troubled asset ratios of 100 percent or greater in the final quarter they reported data before they closed.

Look at these recently failed Minnesota banks and notice how the asset ratio is well above 100%

MSNBC has also compiled a list of banks with the highest levels of troubled loans. If your bank or credit union’s troubled-asset ratio number is near 100, there’s no need to immediately withdraw your money unless you have over $250,000 in your account.

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