Real Estate Investor · SPRING HILL, FL · Member since 2009 · 12 posts · 0 votes
Since they instituted a clause in their approval letter that says they will rescind the short sale transaction if the property is resold within 30 days . This is provision # 10 in their short sale approvals which is policy they adopted from countrywide when they acquired them.
If you have your title agent or attorney challenge this verbiage, BOA/COUNTRYWIDE will usually replace # 10 with a new clause that is even more broad based and prohibitive for flips/resells.
has anyone else experienced this? , or challenged this successfully?
Rehabber · Tucson, AZ · Member since 2008 · 1k+ posts · 802 votes
16y
Originally posted by H Mann:
I offered 275k on a BofA property. They countered with 370k, which I'm guessing is their BPO.
What do I counter back at? 80% of that? 82%?
I agree with Will... You need to know how much the property will sell for quickly. This is where your listing agent should be helping.
Secondarily, you cannot assume BOA is countering at the BPO valuation. BOA does not always counter at the BPO. Sometimes they counter above, at or below. Where did your market analysis say the FMV is? Assuming the BPO came in at $370K, is that accurate? What are distressed comparables selling for?
Thirdly, it is a fallacy that lenders will automatically discount up to 80% of the BPO.
Instead, substantiate your offer with anything that shows they will NET less as a foreclosure than would by selling to you. At what discount to FMV do homes sell for at the courthouse steps? How much have REO comps sold for? How much is the average foreclosure cost in your area. What are the carrying costs? Does the property need any repairs?
You need to know what it will cost them to foreclose an how much they can expect to NET as a result. After all, this is the formula they base their decisions on.
Lastly, based on your numbers and adding extended financing via Will and 6% commissions, closing costs, a 5% price discount to the end-buyer, then 80% is probably a loser. I think you would be leaving a lot of money on the table if you settled for 80% of BPO.
Menifee, CA · Member since 2008 · 194 posts · 46 votes
17y
As far as Short Sales, There is no law about reselling within a certain time frame, therefore they have no right to give you that condition & no way to come after you for it. I just got an acceptance from them on Saturday & it had that condition. I am working on getting around it. I will let you know what I find.
Residential Real Estate Agent · Orange County, CA · Member since 2009 · 289 posts · 95 votes
17y
I'm still new to short sales but how can they enforce this? Once I close on the property it's none of their business what I do with it. Why do they care if I resell within 30 days or even 30 minutes of closing?
So according to BofA, we would have to hold on to the property for 30 days before flipping the short sale? I guess that means no transactional funding. But if I had private money and didn't mind holding the property for 30 days, then everything would be fine?
Investor · Cary, NC · Member since 2008 · 218 posts · 29 votes
17y
Originally posted by ctaie:
As far as Short Sales, There is no law about reselling within a certain time frame, therefore they have no right to give you that condition & no way to come after you for it. I just got an acceptance from them on Saturday & it had that condition. I am working on getting around it. I will let you know what I find.
Can you please keep us updated on if you find a way around this? I too just submitted 2 deals to BOA today and want to know what to expect/how to get around it.
Menifee, CA · Member since 2008 · 194 posts · 46 votes
17y
Ok. They wont lift the condition or let me assign it.... However, I can substitute another buyer. At that point you would have to collect a "negotiation fee" NOT an "assignment fee" They're just trying to be bullies! I honestly don't think they can enforce it, but why risk it. One person recommended closing A to B with one escrow co. & B to C with another. Not too sure about that.. Could still be a problem. I guess if Ken Lewis gets enough heat or B of A eats enough properties, maybe they will change their tune. I have 4 or 5 others through them as well. Might be interesting.
Residential Real Estate Agent · Orange County, CA · Member since 2009 · 289 posts · 95 votes
17y
So far it looks like the only options are ctaie's suggestions of substituting for another buyer or using different title companies for the two closings (not sure about that one, either). Or my thinking is that you can hold the property for 30 days and close on the 31st... which we are trying to avoid in the first place.
So in other words, no I see no viable options for getting around this.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
The substituting buyer may or may not work either. Banks don't like changes to contracts unless THEY make them.
Let us all know if that works.
As for the other idea of two title companies, I was told that the second title company will NOT do it because with that contingency in place, they can not provide a title policy. Please correct me if my info is inaccurate.
Menifee, CA · Member since 2008 · 194 posts · 46 votes
17y
When they eat enough of these, maybe they will change it. Till then, I think the easiest way is substitute the buyer & collect you "negotiation fee"
BTW. Anyone I'm looking for a buyer for this property. Turn key in Canyon Lake, CA. Appearently the buyer didn't get what was going on & doesn't understand paying a fee, even though it was going to save them $21,900.00.
Oh well. What can you do? lol
Real Estate Consultant · Savannah, GA · Member since 2009 · 69 posts · 3 votes
17y
Hey ya'all!
I'm looking at three "BOA" approvals.
Two are countrywide/now BOA different investors shorts, and one is a BOA invested short.
The CW one have the 30 day transfer deal, and the BOA (never CW, investor BOA ALT) short without a 30 day transfer restriction.
Knock on wood since the two with the 30 day already closed and were non investor deals, but the BOA non restricted is a probate deal needing an extension for clear title.
Well either way that buyer plans to hold title for 30 days.
I've had investors tell negotiators their intentions, and they can't do anything. Their legal dept is the only one that can make changes. I heard f one that changed, but it took an attorney 8 months to get them to change the restriction.
Rehabber · Tucson, AZ · Member since 2008 · 1k+ posts · 802 votes
17y
Originally posted by Mitsu O'Riley:
Hey ya'all!
I'm looking at three "BOA" approvals.
Two are countrywide/now BOA different investors shorts, and one is a BOA invested short.
The CW one have the 30 day transfer deal, and the BOA (never CW, investor BOA ALT) short without a 30 day transfer restriction.
I am working on an investor ALT A loan originated by CW so I expect to have a 30 day restriction.
I had several letters from CW in the 1st quarter which did not have the restriction. Then, in July I finally got one which was a BoA origination.
So, you might be correct... As long as the loan is in house, perhaps they are not requiring the restriction.
Mitsu- Do you know the origination dates of the loans which did not have the restriction? Many of the Alt-A's done in late 2007 were unable to be repackaged ans sold. Perhaps this is why they remained in house?
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
We are in the process of putting together a program in which we can fund all your BofA transactions with these restrictions for 30 days. This way, the A-B transaction is closed with our funds, the property is held for 30 days (you are more than welcome to place your new buyers in on a 30 day lease during longer escrow) and then after the 30 day restriction is gone, the B-C is closed and we all get paid.
If you have any Bof A transactions upcoming with these restrictions and need a way to close them, contact us right away so we can put the details together.
We are also prepared to provide transactional funding for a 2-5 day period for those deals that can not use the traditional "flash cash" services used in same day simultaneous closings.
Real Estate Consultant · Savannah, GA · Member since 2009 · 69 posts · 3 votes
17y
Originally posted by Scott Hubbard:
Mitsu- Do you know the origination dates of the loans which did not have the restriction? Many of the Alt-A's done in late 2007 were unable to be repackaged ans sold. Perhaps this is why they remained in house?
Hey Scott!
I don't know when he bought this house or got this loan. This is a probate and pain staking with getting that done to actually close. The letter is from their Getzville NY office. Very odd, one page, two loans both BOA. They say it's an investor deal, but I was told early on that the investor was someone the CSR didn't know.... BOA ALT.
who knows if they will come up with other stips, but the approvals are 1 page (even 1/2 a page) for each loan. No 30 day restriction. Now, we have asked for an extension for the probate to finish, and the buyer isn't planning to flip within 30 days, so .....
I will let you know what happens.
Real Estate Agent · Jacksonville, FL · Member since 2009 · 100 posts · 39 votes
17y
Originally posted by nationwidepi:
Not quite in place as of this minute as my attorney needs to draft the documents for me and protect my interests.
Will be available soon, but please contact me now via email for all interested as I need to know the amounts needed and when to reserve your funds.
Corry - we already spoke via phone so this message does not apply to you, nice meeting you via the phone.
Wow, that is certainly a great service. Other lenders have followied suite with the 30 day requirement. I would definitely be interested how your process works. I currently use transactional funding that's 24 hours only. Any information would be greatly appreciated.