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 26th of January. The trustee sale was scheduled for February 4th and BofA would not discuss canceling the trustee sale until 2 days before it was scheduled. So on February the 1st (and 2nd, and 3rd) we spent over 5 hours trying to get someone at BofA to cancel the trustee sale. In exasperation on the 3rd 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.
Benn Rosales
February 11, 2010 at 12:13 pm
Disturbing report to say the least, I predict buyer disclosure notices updated to buyer beware of the short sale purchase you’re making and the nightmare that may follow.
Justin Boland
February 11, 2010 at 2:43 pm
This article could definitely use a better — or at least clearer — title.
Although to your credit, the biggest reason I read this was just to understand WTF the headline even meant. So then again, maybe you did right.
velda
February 11, 2010 at 2:59 pm
I know exactly what you are talking about because one of my agents had to deal with BofA thru a listing agent. The home was listed, her buyers offered, owners countered and eventually they agreed on a price of something like 92 or 96K (don’t remember the exact amount). Owners agreed but then BofA didn’t agree and wanted 112K. Buyers walked. Home was foreclosed on. House was later listed by a different agent (but same company) for 89900 and it sold for 87750.
Banks do stupid things.
I had a REO property about a year and a half ago. Originally listed at 174,500. It was reduced to 164500 after a month. In the same week, we had 3 offers – one for full price and 2 for 160K – all qualified buyers. At the same time I submitted all the offers, the bank came back and said that all offers were on hold. Well, they were on hold for about 2 weeks, all 3 buyers withdrew their offers. The bank then put the home on auction with realtybid and it sold for $115K in about a week-10 days, the buyer’s agent and I were both paid but with the difference in the other three commissions and the final at 115K was a considerable chunk of money on my side!
Lorraine
February 11, 2010 at 3:11 pm
Bank of America is a total nightmare to deal with. Thanks for the article and it doesn’t surprise me at all. When I’ve called their provided number for a short sale to help a client, I never got the same answer!
Jim Gatos
February 11, 2010 at 8:51 pm
Between BOA and Wells Fargo, I REALLY feel badly for people who’ve dealt with them.. They really are semi evil or just bad news.. I can’t tell you the headaches they’ve given my clients and myself..
nancy deichman
February 12, 2010 at 2:42 am
Bank Of America is the worst Bank in America. They are responsible for the fiancial ruin of many homeowners through their neglect and abuse. They have lied to many homeowners, giving them modiifications and then changing their mind, even after paperwork is signed.
They cost their investors milliions of unnecessary losses by ignoring short sale requests at market prices and then foreclosing and selling the properties for much less.
They should have their current servicing of loans revoked, and drown in their own vomit.
Richard Johnston, Realtor Sherman Oaks ReMax
February 13, 2010 at 3:51 am
Wow…disturbing. If I was the buyer of that home, I would sue bank of america for continueing to foreclosure on a home no longer owned by them. Unbelievable but then again, banks are surprising us all the time with nonsense.
Let’s just be happy that they never got into real estate. Imagine what would have happened…
Joe Loomer
February 13, 2010 at 10:05 am
Russell – this is classic BOA – had a case here where they even offered Vendee financing, closed, then STILL foreclosed on the new owners – even though they owned both notes
Anonymous
February 13, 2010 at 8:27 pm
Russell, great story that had to be told. I rarely comment on blog posts, but yours struck me, because I happen to know an SVP with Bank of America. Don’t hold that against me, though. She is currently working on the B of A / Countrywide short sales and foreclosures team. After reading your post, I immediately forwarded it to her, and asked her for some input. She said that she knows of a project within the team, dedicated to re-engineering the short sale process. So, she said she forwarded your post to someone she knows working on that project…not, as she put it, “that they don’t already have a folder full of” stories like this one. I have to tell you, she was not full of excuses or ways to displace the blame like everyone thinks B of A executives are prone to do. Her emailed response to me was full of heartfelt regret, and a desire to right this very large, sinking, ship. Maybe it’s just because I know and trust her, but I think there’s more good guys at the top than bad.
nancy deichman
February 14, 2010 at 3:22 pm
A folder full? They should have a 400,000 sq ft warehouse full of complaints like this one!
Every client that I am trying to help that has a loan with serviced by Bank of America cannot get answers. We lose buyers that get tired of waiting and move on to a home they can actually close on. Bank of America should be banned from the mortgaging service business all together. They call it servicing. That’s a bad joke. Who are they servicing besides themselves? They are creating huge losses for the real investors by their negligence, and they are causing enormous financial distress on homeowners who are forced to have them as servicing lenders. There is no excuse. Their activity is downright criminal.
Russell Shaw
February 13, 2010 at 10:59 pm
To the person who sent this post on the B of A SVP, THANK YOU! That is exactly what I hoped would occur. I don’t believe that B of A employees are “bad” or don’t care. I believe they sincerely want to change what is happening and will eventually do just that.
T. Albea
April 14, 2010 at 3:12 pm
I want my hard earned tax payer money back.
Maricopa County Trustee Sales
June 14, 2010 at 3:28 pm
Worthy of Note: B of A was recently granted permission to sell a grip of their shadow inventory… Don’t know whether that means foreclosure supply was impacted enough by Fed incentives…
I guess it’s not terribly hard to imagine some slippage in tracking and handling such a massive amount of defaults, non-judicial foreclosure proceedings and short sales…
Not really surprised that it’s B of A getting hounded for reconciliation errors…