Need Short Sale Advice (Tampa: for sale, real estate, foreclosures)

[NYPhinfan13]

I'm looking at a house tomorrow that was on the market last Nov for 239K (it was a SS in pre-foreclosure). It went into contract, but it feel through. It's back on the market, but for 277K now. This house hasn't been lived in for over two years. The bank hasn't done anything as far as fixing the place (ie green pool with stuff growing in it, missing appliances and fixtures, dirty, needs paint, lawn, etc...). I asked my realtor if it was the bank or the realtor who jacked up the price. The response was, that the price was the "bank approved price" and wasn't "negotiable." When I asked why the 40K increase, the response was that the bank probably did their own appraisal and that is the value they will accept based on comps. The price last nov was 249K then dropped to 239K and an offer was accepted by the bank. Why would the bank all of a sudden not accept anything less then 277k? Doesn't sound right to me. Last I checked, banks aren't in the real estate business. Also, this bank (BOA) has tons of foreclosures in this community. Why did they choose to do an appriasal only on this property and not others (I've seen other homes in here that are short sales/foreclosures by BOA). Should I be questioning the information I'm being giving? The realtor I'm working with is connected with this community (is listed on the communty website), however the realtor selling the property is exclusive to BOA. He has other short sales in the community. Any realtor out there hear of something like this? Oh, and I was told that an offer was made yesterday but it was below the asking price and that they're not sure BOA will agree.

[algia]

THIEF'S

They want to see if they can get away with it....there's a house here that sold for $165k, yet another next door thinks it'll sell for $228.....Good Luck with the comps!!!!!!!!!!!!!!!!!

[TampaKaren]

In this case, Bank of America is the servicer and they answer to the investor(s) who are holding the note. Sometimes an asset liquidation company is also involved. Real estate agents were recently asked by BofA to not use the term 'bank approved' because the bank is not the approver. In the case where an offer to purchase has been received or an appraisal or BPO has been ordered, the price is pre-approved because the investor has agreed to accept an amount less than the borrower owes. This creates changes in the list price. If that price is not in line with the recent sales due to location, condition, upgrades, etc. then the list agent can upload supporting pictures of the subject property along with lower priced comparables to justify a difference in price and request an appraisal review or another appraisal/BPO. There's much more to this than time permits, but I hope this nugget will help a bit toward understanding short sale price changes.

[NYPhinfan13]

Originally Posted by TampaKaren

In this case, Bank of America is the servicer and they answer to the investor(s) who are holding the note. Sometimes an asset liquidation company is also involved. Real estate agents were recently asked by BofA to not use the term 'bank approved' because the bank is not the approver. In the case where an offer to purchase has been received or an appraisal or BPO has been ordered, the price is pre-approved because the investor has agreed to accept an amount less than the borrower owes. This creates changes in the list price. If that price is not in line with the recent sales due to location, condition, upgrades, etc. then the list agent can upload supporting pictures of the subject property along with lower priced comparables to justify a difference in price and request an appraisal review or another appraisal/BPO. There's much more to this than time permits, but I hope this nugget will help a bit toward understanding short sale price changes.

Who would the investors be?

[gulfer]

The investor in a lot of mortgages is anyone that bought the paper. There are millions of explanations, some mostly are confusing.

Could be your pension fund decided to buy a block of mortgage backed securities back in 2006 or a complex group of investments called derivitatives. Way beyond me.

Extremely Simplified Version: Banks are required to have a reserve. Banks loaned money to you to buy a home. You bought the home, bank sold your mortgage to investors, which allowed banks to make money and replenish thier reserve, and loan money again. Repeat as often as necessary to put our entire economy at risk.

Grandma and Grandpa mutual funds were big losers!

[TampaKaren]

^^ gulfer, I don't know if I could have explained it that well. Rep points coming your way!

NYPhinfan13, BofA does not endorse any real estate agent or agency. It is possible that the listing agent for the house you like has a lot of experience with sellers who have loans serviced with BofA and uses that as a neighborhood marketing niche. Too, any real estate agent listing short sales represents the seller and not a bank.

[gulfer]

Thanks Karen. But so you know, I often get great information from your posts too! Thanks for being straight forward and honest!!!

[NYPhinfan13]

Originally Posted by TampaKaren

^^ gulfer, I don't know if I could have explained it that well. Rep points coming your way!

NYPhinfan13, BofA does not endorse any real estate agent or agency. It is possible that the listing agent for the house you like has a lot of experience with sellers who have loans serviced with BofA and uses that as a neighborhood marketing niche. Too, any real estate agent listing short sales represents the seller and not a bank.

The seller is gone. It was pre-foreclosure in Nov. Most likely a foreclosure now.

[gulfer]

I guess that surprises me a little. Bank of America has been advertising that they will get you an answer now within 20 days.

But each Short Sale is different. I went to a conference where attorney's were talking Short Sales. The point from the lawyer was that usually in short sales, the owner is working with the lender. There are times when there is a 2nd mortgage on the lender, liens on the properties, etc... All those have to be agreed to before the Short Sale can be 'approved'. The easiest ones to get done are 1 mortgage and not a significant amount under water. Take a small loss for the bank and get that property back on the market.

Scenario:
I bought in 2006 for 200,000, mortgage from BoA. Today's value of home is 90,000
I have my original mortgage for 200,000 with BoA. But I was greedy! In late 2006 I took out a 2nd mortgage from Bank of Anyone. I took a few vacations, put in a pool, etc... for 45,000. I also have an HOA lien on my property because I have been running a business out of my home, which is against the rules, and they have fined me total of 20,000 over the last 6 years.

Now my total obligation for the property is 265,000. As of May 2012 I still owe 235,000 on a property worth 90,000. I can pay my mortgage, but I don't want to because it is not worth my investmet.

(Take all your personal beliefs, responsibilities, ethics, morals, etc.. out of this equation - EVERY PERSON IS DIFFERENT)

So I tell a Realtor I want to sell it. The Realtor looks at comparibles and gives me the 90,000 price. I list it for that as a Short Sale. I get someone two days later that wants to buy it. My Realtor submits the Short Sale Package right away and we wait to hear from the Bank or whoever services the mortgage. The Lawyers and Banks are talking, they are talking to the Bank of Anyone (2nd lien holder), and my HOA. My HOA knows that home is only worth 90,000. Since the HOA is so low in the order of getting paid, they say NO DEAL to the short sale. It is principal because of all the hassle and trouble I have given. Then 2nd lien holder also knows they will not get paid. Bank of America knows that if they give up XX dollars of what they are obligated to get on the 1st mortgage, they won't get anything.

Now it is 6 months later and it comes back as a NO DEAL. Home goes to Foreclosure, which you will probably see for sale in 6 months to a year, and the original owner files bankruptsy and is now renting a house better than he was living in before for the same amount of money.

[Ryan_M]

Thanks for all this great info! I'm thinking I'll be avoiding short sales basically because of the time lag. What about foreclosures? Since it's then (AFAIK) owned by the bank is the price really the price? or is there still some process involved? And does it move through any faster?