The short sale on Verdugo in Burbank has closed, and my nightmare is over.

Well, okay, 2012 W. Verdugo in Burbank wasn't really a nightmare, it was just a typical short sale.  Took way too long, involved a bitter divorce, a seller that wouldn't commit to moving, a loan that was sold at the last minute, etc. etc.  Kudos to our buyer, George, for hanging in for six months.  Thanks to everybody who expressed interest in the house.

More drama on the Verdugo short sale, or why is BofA still selling toxic junk?

Just when I thought the short sale on 2012 W. Verdugo, Burbank was finally going to close, we had another crisis this week.

Backstory: Lender Dana Dukelow had told me the following story: he had funded a loan on a short sale, and it was about to close, when the title company discovered that the lien/loan was no longer owned by the bank that had approved the short sale on the property.  That bank was BofA.

Why is this important? Because there is no longer a valid short sale approval since the original approving bank has nothing to do with it anymore.  The transaction can’t close until – and if – the new bank approves it.  People are trying to move, their cash is tied up, etc, etc.

Dana’s story alarmed me and I decided to check on Verdugo’s BofA loan.  (Citimortgage owns the second loan; it too has been approved for short sale.)

Sure enough, it showed that BofA sold this non-performing loan to HSBC on November 4, 2011, several days before BofA issued the short sale approval – on a loan they no longer owned.

We all were running around with our hair on fire.  I spent several hours on the phone, and so did the short sale negotiator and escrow officer.  There was no record of the loan at HSBC (just so you know, HSBC’s customer service is very spotty).  BofA had no record of the loan being sold, although it had recorded as such at the county recorders.

The story has a happy ending due to a series of coincidences.  Turns out that BofA is the servicer of HSBC/Merrill Lynch loans.  So their guidelines meet HSBC’s guidelines, and the original approval still stands. 

We are some of the lucky ones.  Other Realtors that I’ve talked with are in limbo/hell on their BofA transactions.  One was told by BofA, “We sold 9000 Freddie Mac loans and are behind on our coding.” Great, just great.  So while the bank processes paperwork, buyers and sellers are sitting on boxes, holidays are ruined, foreclosures are proceeding, etc.

Okay, I’m not so savvy on the inner workings of high finance, but this brings up another question: why are the banks selling these toxic assets underperforming loans to other banks?  Who benefits?


And yes, we're on for a 12/23 closing.  Please cross your fingers and hold your breath.

BofA called to help on my short sale, but didn't

BofA's social media team has been monitoring their online reputation, because after I last bashed them online, they contacted me to ask if they could help with the short sale on Verdugo.

Short answer: they didn't help at all.

Back story: I have used a third-party negotiating company on this transaction.  That's not uncommon.  The 3rd party company is listed as the authorized contact.

So the first thing the nice BofA lady told me was that she had indeed looked up the transaction -- and I wasn't authorized to talk about the sale because I wasn't the listing agent.  I tried to correct that, but she wasn't having any.  She said that the real listing agent should contact them through Twitter, and perhaps then BofA could escalate the short sale.  When I explained this to the 3rd party negotiator -- he's the listing agent according to BofA -- his jaw dropped in astonishment (he's only had about a bajillion live-person conversations with BofA staff about this).  So he's contacted @BofAhelp, but has not received a response.  And they are not answering their phone either.

So much for managing your online reputation, eh? I wish BofA would devote as much manpower to getting their short sales wrapped up as they do to social media.

Now BofA wants to know if they can help me

For those who don't think social media has an effect: BofA Help has tweeted me several times since I posted the item below.  I've tweeted back that they can help me by telling me what is going on with my short sale.  Now, they've promised to call me tomorrow.  I wish they'd spend more time clearing their backlogs of short sales and less time managing their online reputations.

How my short sale is going, chapter whatever, or BofA is the bitchenest bank of all time!

We've been in escrow for three months now on 2012 W. Verdugo in Burbank and our stalwart buyer is hanging in there.  BofA and Chase, the lenders, verbally approved the deal about a month ago. But we still need their approval letter.  What's the hold-up? Our outside negotiator learned this week that his cohort at BofA had been fired, and now there's a new person to deal with there.  O BofA, I love you so.  The latest is that the file is with the investor for approval, and once that happens, we'll get our approval letter.  Short sales are being streamlined? Not in my world.

That was fast. 2012 W. Verdugo Ave. is in escrow

I listed 2012 W. Verdugo in Burbank last week for $525,000.  It went on the multiple listing service on Monday.  By Wednesday night we had a great offer.  By Friday we had opened escrow.  By today we have three good backup offers.  Did I mention that it's a short sale?

I must have fielded at least 20 calls a day from Realtors, and at least 15 calls and emails a day from buyers. (Because it's a short sale, I can't represent both buyer and seller.)  The house was mobbed during showing hours.

What can we infer from this very fast activity? That the market is "back"? I wish. That it was priced too low? No -- with that amount of traffic, we should have had 20 offers.  That people really like mid-century architecture? Yes.  That people want to live in little Burbank, in spite of the fact that it's not exactly a bastion of hipness? Yes.  That people are more educated about short sales than they used to be? Yes. That...oh never mind. 

But the fun (and the work) is just beginning since it's a short sale, and I'll keep you all posted.  Did I mention that the 1st lending bank is BofA? MMMmmm, my favorite!

Tried to get a loan mod lately? Was it difficult? You weren't alone; read this

I know business news is boring, but this article from today's L.A. Times is a must read.  The headline says it all: "3 banks lose loan mod incentives" from the federal government.  Those three are BofA, JPMorgan Chase and Wells Fargo.  The government says these banks need to improve their loan modification practices to qualify for the money.  I'll say. Several other loan servicers were judged to be poor performers too: Ocwen, American Home Mortgage Servicing, Citigroup, GMAC, Litton, OneWest Bank and Select Portfolio.

Some short sale experts I've spoken with believe that the small amount of money that the government is offering these banks is a joke, and this article quotes others who say the same.  And the U.S. House of Representatives recently voted to end the program. To me, whether or not the banks get money for modifying loans, it's bizarre that banks would force their own customers into foreclosure instead of knocking points of their interest rates.  How does that scenario make sense?

BofA gets foreclosed on! Way to go, homeowners!

Bank of America wrongfully forclosed on home owners who paid cash for their home.  So, as you'll see in this video, the homeowners foreclosed right back in order to get their legal fees paid.  There's a little twist at the very end of this, so you'll want to watch all the way through.  I know; I shouldn't be so gleeful, but it is the evil empire Bank of America, after all!

Short sale gossip! This is on my Facebook page, too

Note for 5/13, 11:00 a.m.: I'm having problems with Blogger.  It has lost a couple of posts.  I'll put 'em back up soon.  This is also on my Facebook page Judy Graff, Broker Realtor.

I have short sale gossip! A few weeks ago, I heard that the Bank of America short sale system, Equator, had "lost" 30,000 files. One of them was a transaction file that I was working on for buyers.

Now, here's the latest:

Our office’s short sale experts told us the following on Tuesday: Bank of America has okayed overtime for its short sale staff and has also begun to outsource some of its short sale files.  Apparently, they are expecting many more short sales in the coming months.  Also, for BofA customers that are behind in their mortgage payments, the bank is apparently going to begin requesting that those owners list their home for sale as a short sale.  Don’t quote me on this, but also don’t say I didn’t warn you.

BofA has figured out a new way to torture short sale buyers

Honestly, Bank of America must have a department of weasels who stay up all night figuring out new ways to stab clients and potential buyers in the back.  Here's the latest from a short sale I'm involved with in Toluca Lake (I represent the potential buyer, who wants to pay all cash): BofA will no longer take equities (stock funds, etc.) as proof of funds to complete your purchase.  So now, if you send, say, your Morgan Stanley monthly statement with your offer to show you have the money to complete the short sale transaction, that won't be good enough.  BofA wants you to liquidate those funds and put them in a cash account, even though they haven't approved the transaction yet.  Or else, you can come up with a pre-approval letter from a lender stating that you have liquid funds to close. No word on whether they want you to liquidate your 401K in advance of approval.  What next from Darth Vader BofA?

Help for those facing foreclosure. Or not.

Here is an article from today's L.A. Times with the following headline: "California plans $2 Billion program to help distressed homeowners." And here are details and quotes from the article:

"The Keep Your Home California program, which uses federal funds reserved for the 2008 rescue of the financial system, has the potential to make a sizable dent in California's foreclosure crisis and help the general housing market. State officials hope to fend off foreclosure for about 95,000 borrowers and provide moving assistance to about 6,500 people who do lose their homes." Sounds great, right? But wait. Apparently the banks aren't rushing to get on board. "Out of the five major mortgage servicers — Bank of America Corp., Wells Fargo & Co., JPMorgan Chase & Co., Ally Financial and Citigroup Inc." only Ally Financial is on board.

And free-market proponents won't like this: "By keeping some cheap foreclosed properties from reaching the market, the program could give a boost to home values in general."

More details: "The biggest of the plan's four parts allocates $875 million as temporary financial help to people who have seen their paychecks cut or have lost their jobs, providing as much as $3,000 a month for six months to cover home payments and associated costs. The second-largest chunk of money, $790 million, is slated for a principal reduction program that would write down the value of an estimated 25,135 underwater mortgages.

Another piece would use $129 million to provide as much as $15,000 apiece to help homeowners get current on their mortgages, and another would take $32 million to provide moving assistance for people who can't afford to remain in their homes."

To qualify in L.A. County, a family could not earn more than $75,000 annually. Yes, that's a lot. I predict that, just as they are not doing now, the banks just won't get on board. And foreclosure help will continue to elude many homeowners.