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 guess we’re having a local fail in leadership at Wells Fargo – they’re just as bad here as BOA with short sales. They’re even worse than BOA when it comes to closing “normal” transactions on FHA, VA, and conventional. products.
Hopefully, HAMP’s new guidlines for Home Affordable Foreclosure Alternatives will streamline this for all – although waiting until April for enforcement is ridiculous.
Navy Chief, Navy Pride
Joe the problem is there is NO enforcement. It is just guidelines and they need to waive any deficiency for a whopping $1,000? It will be about as successful as the Titanic
Russell,
If you hadn’t shared it, I would have never known it. My experience with B/A in ’09 was them losing a $305,000 wire transfer for 5 days. They ‘found’ it on a Monday after it was sent on a Wednesday with their client paying extra for an overnight receipt charge which they never recovered. Pitiful.
I still can’t get over the WF headline from late in ’09 where they rejected an offer on a bank owned because they didn’t like the prequal letter….which ironically was also from WF.
[...] Bank of America, RE/Max and Wells Fargo. From Very Bad to Great. – Great write up by Russell Shaw, hopefully BoA is paying attention. And Russell, it has been a [...]
Well said once again….your obejectiveness is refreshing…
I have worked with B of A and they are hard never with Well Fargo but the easiest was National city less than 30 days start to finish great company.
Russell, I could not agree with you more about BofA’s performance. It drives me nuts when I see their commercials showing how much BofA is doing when I know as a Real Estate Broker( Re/Max agent) I know just how bad they treat Realtors and customer! On the other hand, I just completed a short sale with Well’s that took TWO WEEKS to approve by the bank! The Well’s rep contacted me 3 days after I sent in the short sale packet with his direct number and email address! He reviewed the packet and had a BPO ordered TWO days later. I’m sure that having a complete packet helped speed the process but I have sent in complete packets to other lender with dramatically different results. It is also nice to someone telling these lenders that we as agents have very long memories!
Great write up!
Chuck
I do a lot of short sales and REO’s as a REMAX Associate in Central Florida. I hold the CDPE, SFR & HRC Designations. I have been working very hard in ‘o8 & ’09 to help homeowners Modify (No Monetary Benefits to me but GREAT Feeling of Accomplishmnet), I also have done several short sales & REO’s Successfully.. I have found the smaller the bank usually the easier and quicker it is to get approvals. I have found some larger banks can seem to be easy to deal with and others not so good. I have also found that there are some really lazy negotiators out there due to I have done multiple deals with the same lenders but different negotiators. I sat in a meeting this month with Dave Linger and seveal other REMAX Agents and was very proud to find out this information directly from Dave. As a REMAX Agent working hard to work with homeowners in Central Florida to get their homes either modified or approved for a short sale I am very happy to have Dave on my side… I have two GREAT Brokers who support me as well. That never hurts…..
Hey hey hey …not so fast. Praising BoA and CW (Countryworse)…already…Godsh…which planet have you been. Of course the top executives at BoA did not know because Mr. Chairman of the Board of Re/Max was talking to the wrong persons and those people do not control that dept. That’s why they don’t know what is going on. If those people makes the decisions; they have to know and will know its’ REO/BOOK ratio and Closing vs Offer ratios. They purposely withheld approval of short-sale so their inventory value (BANK REOs) would go up in an up market; thus their stock would raise on an increasing scale. They are not approving the short-sale and is holding a MASSIVE MASSIVE inventory and that is why their stock is up from last year. The bank is insanely greedy. Since they are not making any loans; thus holding the inventory high in an increasing heated real estate market is a good business decision for them but not quite good for the common man like you and me. As for the homeowner, yeah …I feel sorry for you. You think the bank’s short-sale policy could change, yeah… if that happened, the sun would come and raise from the west instead of the east and James Cameron’s new film “Avatar” would be in 1D instead of 3D. One Chairman Realtor and a couple of Senators can’t do nothing to the bank on its Ten Billion Dollars of REO inventories, unless you are Mr. Barney Frank. Yeah…I think Bank of America should be renamed “Bank of United States of America”.
I heart Dave Liniger.
[...] • Prequalification For A Loan – The lender is going to want to see that the buyer has been completely prequalified by a reputable lender who has examined the buyers credit file with all three reporting agencies in addition to examining the buyers income and debt ratios • Realistic Expectations of the Time Frame – There is no set time frame in which a short sale transaction can be closed. One of the largest factors is how well did the listing agent prepare the short sale package for the seller’s lender. This is totally out of the buyer’s control and presents a real source of frustration. As stated earlier, the process can take 4 to 5 months. • Flexibility of a Closing Date – If a buyer is on a very strict time frame, such as an apartment lease coming to conclusion, a short sale is probably not the avenue a buyer in this situation would want to pursue. The time frames will almost certainly change and there can be multiple closing date extensions to the contract. • Resources to Make Necessary Repairs – Considering that the seller has experienced a financial hardship of some kind it only makes sense that they were probably unable to maintain the home. To help identify what potential problems there may be, make certain that you have a home inspection by a qualified home inspector. • The Lender Makes the Final Call – Buyers of short sale properties must understand that even though they have reached an agreement with the seller, it is the seller’s lender or, in some cases, lenders who will make the final call. It is possible for one lender to approve the transaction and the other not to approve it thereby starting the negotiation all over. • The Sale Can Fall Through – Through no fault of the buyer or the seller the sale of the property can fall through. As earlier stated, the lender has the final say as to whether or not they will approve the short sale. • Interest Rates Change – Interest rates change on a daily basis. In times of a more volatile market they can even change several times in a single day. When a contract is entered into a buyer may be expecting one interest rate and by the time the sale closes a different rate may prevail. Currently interest rates are at historic lows and the market is not volatile. This means that interest rates are remaining constant. I just wanted to share that the potential exists for interest rate fluctuation due to the amount of time that lapses between when the contract was entered into and the time it closes. • Knowledge of Who You Are Dealing With – For those of us who have successfully closed short sale transactions, we have a pretty good idea of what to expect from the various lenders. RE/MAX Chairman and CEO Dave Liniger took it upon himself to help educate some of the powers that be as can be witnessed in this article. [...]
Being at the narrower end of the funnel as a lender, we see a lot of this activity from a lot of different banks. Beyond the way they react to their troubled accounts, the banks don’t have a great reputation on the new origination side, either. They have done a pretty good job of capturing market share during the mortgage crisis (they caused) and they haven’t been especially adept at handling the new business. Bank of America continues to be the featured bogeyman in the horror stories we hear from our Realtor sources.
Oh, my word. I went to Houston yesterday to hear Dave speak. He told us this story! It is so awesome.
I agree with your notion that Executives that don’t know what their weak points are create a mess!
Hope that Chase would do the same as Wells and B of A.
Absolutely – Atlanta Short Sales & Foreclosures!!! Great write up & true too……
I have to admit, just finishing up a short sale with BoA right now, they really are trying. This equator system is finally starting to run smooth and make the process tolerable.
Bank of America has come a long way from 3 years ago when I first started doing short sales. Wells Fargo on the other hand is terrible. They sit on the file and keep on asking for documentation over and over again ( because they sit on the file so long). Chase is beginning to get better. Quite frankly, Wells would be the worst on my list because they are extremely rigid and difficult to work with.