When helping people complete a short sale, I'm exposed to each person's personal life to understand the hardship one may have endured to be forced to sell their home. Some people choose to short sell because it's a smart move financially, but some are forced to sell because of hard times. During the weeks of learning each person's situation, we become close to our new friends and share their emotional roller coaster ride.
One disclaimer before reading on: the problems described here are rare and happen less than 1% of the time. Don't read this and think that these circumstances are normal or common. Most of our short sales are completed in less than 90 days.
This particular seller, we'll call him Mr. Smith, contacted me after receiving one of my flyers in the mail. After explaining to Mr. Smith how we could help, it was his turn to share with me why he needed help. Mr. Smith explained that he was laid off from his job and three months later, his wife left and asked for a divorce out of the blue. He also explained that he had been trying to do a loan modification with Bank of America for the last ten months! Mr. Smith was understandably frustrated at many things at this point, but he remained in good spirits. I empathized with him, and admired the fact that he had a positive attitude about his situation, despite the negative aspects. Mr. Smith simply said: "I don't care about the house anymore. Bank of American can have the damn thing back. I don't have any money to pay my overdue HOA bill, no money to pay you, and I'm not giving Bank of America another dollar." Who could blame him?
I explained to Mr. Smith that our services are free to him and expressed that the worst thing someone can do is walk away from a property and let it go into foreclosure. I also explained that he had a legitimate hardship and the short sale would be very simple. I told him that I expected it to take about three months.... I ate those words later!
Mr. Smith completed the necessary paperwork and we got a full-market-price offer for his property shortly. Bank of America took a little longer than normal to respond, but things were moving forward smoothly. After 90 days we got short sale approval from Bank of America, but it did not release the seller of the $154,680 deficiency loss. This happens sometimes, but it's no problem; we just go back to the lender and fight for the seller's release of deficiency, as usual. We informed the buyer's agent that we had the approval letter, but we needed to get Bank of America to change the approval letter to one with the "release" verbiage. Within 12 hours, the buyer's agent called us back to tell us that the buyer was no longer interested in the property. All that work and time, and now the buyer is walking away! That's very frustrating, but it happens and we keep trying. We put the property back on the market and quickly got another offer. We submitted the new contract to Bank of America and after 90 days of processing and negotiating, Bank of America informs us that they belief that the buyer and seller are related and therefore will not agree to the short sale with that buyer.
WHAT?!? That's crazy! Bank of America has the buyer and seller's personal information, social security numbers, arm's length affidavits... it's impossible. But Bank of America would not correct their mistake. This EXACT SAME THING happens to two more buyers! Rather than continue to do the same thing and expect different results, we spent literally hours and hours on the phone with Bank of America, jumping supervisor to supervisor, trying to get answers and help. After explaining the situation in depth and submitting verification documents that this problem had occurred multiple times, we finally reached out to a supervisor at Bank of America who agreed to help us.
Quickly, we found our fifth buyer, and we all seemingly held our breath for the next 45 days. Finally, Bank of America issued us an approval letter, giving the seller a full release of all mortgage debt, including the full release for the $154,680 deficiency. Additionally, the mortgage company agreed to pay the $6,579 HOA bill at closing. WHEW!
This short sale approval was special to me because Mr. Smith was truly having hard times, even more so than most. Mr. Smith always remained positive. He had no money to his name and had a series of rain clouds following him, but kept his chin up. I wasn't about to stand by and let a "too big to fail" bank walk all over him. This short sale took me and my team 18 months to close.... EIGHTEEN MONTHS. But I knew that if we were persistent, I would get the approval eventually. I was willing to never give up and keep pushing myself, my team, and our ideas to the next level, and it finally paid off for the seller.
THAT'S what persistence and dedication is all about. Never giving up, not taking NO for an answer, and being willful enough to dig to uncover the problems.