My Strategic Default in Olympia Washington (1st BOA, 2nd Green Tree)

There has been an interesting twist to share. My agent called and said that the investor, Fannie Mae, had a teensy weensy request to include in the latest offer from the buyer in our short sale. Fannie Mae needed us to sign a promissory note agreeing to pay back like $110k and all would be right in short sale land. I say what, what? Both my agent and I had a good laugh, then we agreed that he would submit the latest paperwork with me agreeing to pay back $0, at 0% over 0 years...now that's more like it! Just when you think things are too good to be true, they aren't. Anyway, I think its a minor blip. Fannie Mae came back and asked for a letter stating why we weren't willing to sign a promissory note. I produced it in a few minutes. It reads like this (paraphrase)...."how about we stop this nonsense, let the house go to foreclosure and I don't owe a dime?".....I mean really? Why would I even think about paying back $110k in the short sale? Its a short sale people, not a settlement. Ludicrous. Anyway, Jan 1st, 2015 is a day away and one more rent payment to us. I hope Fannie Mae keeps this up!
My first thoughts were "Whatcha Talkin about Willis?" - Old TV Show reference from - Different Strokes. Anyway there are MANY people who sign those promissory notes simply because they just don't know any better. How sad for these banks to take advantage of them. I love your response letter. Keep up up to date! - Happy New Year!
 

StrategicDefaultInWA

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Apr 19, 2012
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Its gone from funny to weird. Fannie Mae came back after our refusal of the request from FM for a 110k promissory note with a request for a 24k note. I said no. They told my agent that a contribution from me was required to do the short sale. So my agent and I agreed to tell them we would bring 1k to closing. Then came a request for 7k stating that if we contributed 7k, they would move the short sale forward. I said no. Then BOA requested a letter from me explaining why I'm not willing to bring money to closing so they could take it to FM and try to get some traction. I produced the letter stating clearly that we have decided to not put any funds towards the house in the form of a settlement, closing cost or a promissory note. If that was required, then we would allow the home to go to foreclosure. We should hear back from FM and/or BOA tomorrow. To make it weirder, GreenTree has patiently waited in the wings for their 6k from BOA to settle this thing. Its BOA and FM that are holding it up.....go figure!

So I have to ask this to all you fine folks following this thread that have completed a short sale....did you have to bring cash to close the sale? Or if you are in process, have you be required to bring cash to close?
 

vantuckian

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Mar 22, 2012
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Hey SDinWA, while I don't have the short-sale experience you're going through, I have a comment about the 2nd serviced by GT. You may want to check of the actual note holder for the 2nd is BoA, and if it was originally a CountryWide loan, it makes even more sense that they are patient, because they have little chance of getting anything out of that 2nd. The loans from CountryWide that were securitized are problematic:
http://www.dailyfinance.com/2010/11/22/bank-of-america-mortgage-document-errors-trouble-countrywide/
If the note wasn't sent to the investor, there is no way to fix it that will allow either the investor or BoA/GT to foreclose/recover non-performing loans.
 
Its gone from funny to weird. Fannie Mae came back after our refusal of the request from FM for a 110k promissory note with a request for a 24k note. I said no. They told my agent that a contribution from me was required to do the short sale. So my agent and I agreed to tell them we would bring 1k to closing. Then came a request for 7k stating that if we contributed 7k, they would move the short sale forward. I said no. Then BOA requested a letter from me explaining why I'm not willing to bring money to closing so they could take it to FM and try to get some traction. I produced the letter stating clearly that we have decided to not put any funds towards the house in the form of a settlement, closing cost or a promissory note. If that was required, then we would allow the home to go to foreclosure. We should hear back from FM and/or BOA tomorrow. To make it weirder, GreenTree has patiently waited in the wings for their 6k from BOA to settle this thing. Its BOA and FM that are holding it up.....go figure!

So I have to ask this to all you fine folks following this thread that have completed a short sale....did you have to bring cash to close the sale? Or if you are in process, have you be required to bring cash to close?
SDinWA, so from $110K to $7K? Wow those bastards (excuse my French) imagine if you had given them the $110K. I've not heard of people being "required" to put down $ during a short sale. That is simply the lender trying to recoup everything they possibly can. They went from $110K to $7K then they can go from $7K to $1K.
Are they going to put a waiver of a deficiency judgement in the short sale document if you don't give them some coin?
 

StrategicDefaultInWA

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Apr 19, 2012
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Yes, they will try anything to squeeze any last bit of cash out of the borrowers. We are committed to not putting any additional cash towards the house. Not even a penny. My agent has forwarded on our letter to this affect to BOA who has delivered it to Fannie Mae. We should hear something this week. The unofficial word is that they are hopeful this will move forward. I'm fine either way.
 

StrategicDefaultInWA

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Apr 19, 2012
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Update - Fannie Mae "Draws a Line in the Sand"

That was the latest word from my real estate agent yesterday. My latest request was to close the short sale with $0 funds from me. Ironically, this has been my only stance from the beginning of this short sale process. Fannie Mae's response, via my agent, was they are drawing a line in the sand at either $7k cash from me at closing or signing a promissory note for $24k. Apparently this "line in the sand" is not negotiable. I find their approach very interesting because we have never even considered "negotiating". They, on the other hand, have gone from a request for a $122k promissory note (that's right, $122k) down to $24k note or $7k cash to close. I ask you....who is negotiating here? Surely not I!

I told my agent that regrettably, I consider this process over and we have walked away from the table. He is trying to convince us to proceed, but our mind was made up 3 years ago when we started this journey....we are not putting 1 cent more towards this mortgage. I have several issues with FM's stance:
  1. It makes absolutely no financial sense for us to agree to contribute cash to close. The fact of the matter is that it makes perfect sense for us to back away and allow foreclosure to proceed. Its a net gain for us. Each month that passes, we collect a rent check.
  2. It makes absolutely no financial sense for Fannie Mae or BOA to not do the short sale even with zero contribution from us. If it goes to foreclosure, their costs are higher and the lost revenue potential is extended for them by another 6-12 months.
  3. Asking for a $24k promissory note from me is actually irritating to me and an assault on my intelligence. I suppose they have every right to do it, but it is totally incongruous with the other option of $7k cash at closing. Besides, doing nothing and letting it foreclose costs me nothing.
  4. I don't negotiate with irrational people (please refer to #2 and #3 above). They said they won't negotiate, but they are the only one negotiating, they lose if I walk away, I gain....I never intended to negotiate from day 1, but will not do it with irrational/illogical people.
So that's where it stands. We are walking yet again...first from the home and second from the short sale. So, the journey continues! More to come. Stay mortgage free my friends!
 

bythebay

LoanSafe Member
Jun 24, 2011
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WA
I just wanted to chime in to say thanks for posting all this. We had considered going down this path in 2015 since there has been zero movement on the foreclosure and we are sick of the waiting game and also for some other reasons. I read through the FM documentation about their new policies and that we would qualify without hardship etc and that was very appealing. But then reading through the promissory note and contribution sections it really looked like they were aiming to get some money out of the deal. So it is interesting to see how that is absolutely true with your interactions with them. We may still go down this path in the next couple months. So it is really nice to know how you got them down to 7k. Honestly, I think in our situation we would probably take that deal. 122k - no way!
 

StrategicDefaultInWA

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Apr 19, 2012
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No, there have been no threats by either BOA or GT. I suppose its a possibility. At this point I don't see how that would worsen my position other than being an added hassle. They would still just get the home back and the process would cost them more. Anyway, can you point me to the member/thread you are referring to?
 

StrategicDefaultInWA

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Apr 19, 2012
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Update 2/7/2015: A Short Sale Rollercoaster

I'm not sure I could condense the last couple of weeks into a book. Up, down, sideways, diagonal goes the frantic rollercoaster of my walk. Some things I will share here and others I'm going to need to keep close to the vest until this all settles out. The last time I posted, Fannie Mae had "drawn a line in the sand" at requiring me to sign a $24k promissory note or bring $7k to close. Since then, here's what has transpired:
  1. We flat out refused to contribute to the sale
  2. My agent and the buyer's agent agreed to contribute part of their commission to cover the $7k. Fannie Mae refused and said it must come from me.
  3. We refused and I told my agent that this was over.
  4. In the meantime, BOA is trying desperately with my agent to get Fannie Mae to move it forward without our contribution. They clearly get the logic that Fannie Mae can't, we are better of if this drags out and I don't PAY TO SELL MY HOUSE!!!
  5. Then the revelation occurs...BOA discloses that my loan was selected along with many others nationwide by Fannie Mae as part of a "pilot" program. The pilot is, get this,....Fannie Mae handles the ongoing review, negotiation and final approval to show the banks that they can get more money from the sellers (I'm of course paraphrasing, but its basically that).
  6. Now this otherwise illogical process, begins to make more sense....Fannie Mae is trying to prove to the banks that they can manipulate us emotionally overwrought, financially strained and/or ruined borrowers into throwing good money after bad all for the sake of closing the book on our loans.
  7. So the BOA rep has now requested that Fannie Mae allow BOA to take the file over and move it forward without any contribution from us. This request has apparently gone to Fannie Mae in the form of a detailed hand crafted email from the BOA short sale rep.
  8. Now we wait....
Needless to say, I'm very, very PO'd at this. It furthers my absolute resolve to not even cough up a single penny toward closing this deal. I would also encourage any of you out there that are considering a short sale or in the process....do NOT, please for heaven's sake, do NOT be willing to bring cash to close the deal unless you are absolutely desperate to complete the deal...and if you do, please hold out to the bitter end with your number being zero until the process bottoms out. Its clear to me that it is far better for them to close the short sale than to let if foreclose. Holding a cash contribution requirement over the borrowers head to get it done is just wrong!
 

StrategicDefaultInWA

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Apr 19, 2012
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Certainly makes you think doesn't it? Check it... Fannie Mae tops the list of bailout dollars received. Take a look at this for some accountability of the government bailout: http://projects.propublica.org/bailout/list

Of the $700 billion dollars disbursed in the financial bailout, FM received approximately $116B (#1), BOA received $45B (#5). Both are showing 10-20% profits. So I ask you, from whence did the bailout come and to where did it go? Some say the "government" bailed them out. What, you think Obama lent FM the money.....NO...."WE" did! That is taxpayer dollars that "WE", "YOU" and "ME" lent them (aka "gave them) and will never get back. Oh sure, some will pay it back in part or full, but its not like we are getting a bailout.

So when my financial back is broke, maybe they show me a little love? Not a fat chance. While borrowers ask for a little mercy, they get a sucker punch to the gut, then while hunched over, they get a knee to the face...."If you will sign a promissory note for $124k, we will let you sell your house for $370 and we will collect both sums of money". Does that seem fair? Judge for yourself.
 

StrategicDefaultInWA

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Apr 19, 2012
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Short Sale Attempt #1 Officially Canceled

Well, we got the official word from Fannie Mae via my agent, then the official letter from BOA that the short sale was canceled. The reason for the cancelation was that the seller failed to contribute. So, we are going around on the Short Sale Elliptical Trainer at least one more time. I signed and accepted the new offer by the buyer which is now $10k less than the first. Hmmm....me thinks that Fannie Mae is making this much harder and more expensive than they need to. Oh, if logic could govern the process. Also, they miss yet another 4-5 months of house payments while I collect rent. Good times my friends.
 

StrategicDefaultInWA

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Apr 19, 2012
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County Records Update

I haven't checked the county records in a while. I noticed that they recorded two (2) Discontinuances of Trustee Sales documents. Finally catching up their records. There was a sale pending from Jan 2014 and April 2014 and I never saw official discontinuances until over a year later. Even though I know that during short sale attempt #1, they assured me that the short sales were halted. Anyway, the discontinuances just recorded beginning of this month, Mar 2015. Not earth shattering, but interesting. In the meantime, we are now officially moving ahead with Short Sale Attempt #2. I will keep you posted on the progress.
 

StrategicDefaultInWA

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Apr 19, 2012
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Short Sale Attempt #2 Underway

We are officially underway with our second attempt. We've accepted the new offer on the home and its been submitted to BOA for review. We've filled out a new Borrower Election Form today and submitted it (just a fancy term for short sale application). You might ask yourself "why are you doing this SDinWA"? You tried once and failed. Well, apart from the obvious, I collect more rent, there is an interesting twist in this attempt. My real estate agent shared that my file has moved to an entirely different group. In fact, its now being handled by an in-house BOA short sale rep vs. the 3rd part short sale company that was servicing it prior. Also, previously, the file ended up with Fannie Mae. My hope now is that it stays with BOA the entire time, which would maximize our odds of getting it approved without any cash from us. My agent said that our short sale should be in the negotiator's hands in about a month. More to come....
 

StrategicDefaultInWA

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Apr 19, 2012
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New Notice of Trustee Sale and new Servicer

A new NOTS was posted to the house a couple days ago for July. It made the county records as well. Another wrinkle is that we received a letter from BOA stating that the loan servicing was sold or transferred to Seterus, Inc. It will be interesting to see how this affects the short sale process. According to my real estate agent, this could set the short sale back a few months.
 

StrategicDefaultInWA

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Apr 19, 2012
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Well, more twists, turns and undulations yesterday. At first, my agent said it was looking grim for getting a short sale done with Seterus and we would need to wait until May before Seterus would even start officially servicing the loan, with the impending trustee sale set for July. Now, my agent took a flyer and is trying to re-initiate with BOA/FM again! He was instructed to resubmit all our new paperwork then resubmit all necessary documents to HomePath. That was completed and now its wait and see. We could still get this done yet before its transferred!