Did you know that? I didn't. Until I read this article by Sally K. & David L. Hanson.
This is pretty serious stuff. If you are working with Short Sales please be sure to notify your Sellers and give them this information. I am not an Attorney nor do I play one on TV so I do not know the legalities of this. I do know though, that if it were me, I'd much rather avoid the issue all together and pull my money out of the bank that I have my delinquent mortgage with. Better safe than sorry.
If you read the comments to Sally and David's post you will see that this IS happening. And it's happening all over.
And of course....Bank of America is one of the culprits.
Be a Short Sale Superstar to your Sellers and make them aware of this situation today. OK?
Do NOT be foreclosed on! Avoid foreclosure. Short Sales DO close.
Want to find out more? www.CentralFloridaShortSales.com
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Bryant...I didn't know that.....thanks for this information and keeping us informed.
Thanks for the info. I will be sure to read their article on this.
wow...this IS serious stuff.... Can you imagine not only losing your house..but what little money you have to live on???
Faster than a speeding bullet...snatch the pebble from the hand... They are trying to un-ring a bell. Hate it for those in need that are being engulfed. Boo on this practice.
When I list a short sale I always tell the sellers to seek legal counsel and tax advice. Anyway, took a short sale package with bank statements. Asked for statements the next month. They were from a different bank. I didn't tell them to switch, which leads me to believe somebody else did.
Great post, I have passed it on!
Had Wells Fargo seize funds from an insurance claim in which my short sale sellers were attempting to correct damage from a flood (resulting from a stolen Sub-Zero). Stuck a little extra money in their coffers (think the insurance company would be happy to know they just gave the bank 20k?) and caused the property to eventually sell for at least 50k less than it otherwise would have. Is it any surprise that this brain trust helped bring our economy to the gates of Hell?
Bryant - Sally & David tipped us off about the short sale lenders grabbing money out of accounts. It happened to one of my sellers. Richard Zaretsky added more to the discussion. Incredible.
BB, thanks for the heads up. I have not had the pleasure of a short sale yet, but with the info here I am certainly feeling like I could move forward with one, considering the army of people I have at my command with all the knowledge in the world!
I was at a closing yesterday, the attorney was handling his first short sale, we had quite a discussiona about it. The listing agent dropped off the contract info, offer, etc to the attorney and said "this is a short sale" and walked away. The seller had done a bit on his own, but gotten no where. The attorney is not familiar with short sales and looked like Bambi caught in the headlights. He was just beginning to understand the magnitude of the problem that had been laid at his feet. He should join Short Sale Super Stars! That is, if he wants to really learn how to handle short sales!
And about this money thing, wow. I am shocked, well, not shocked, I believe it, but don't want to believe it. What I want to say is not appropriate for this venue.
Great post, thank you.
Bryant,
This is nothing new!
Why would anyone shorting the bank except other wise?
Banks have been able to do this for decades, on any account that's delinquent. The timing has to be right to be legal and if I remember right the accounts have to be in the same name/s, but it's been a very long time. Even federal banks have to follow state law so there could be 50 diff rent interpations. Oops, 58 per BO's.
CYA! Pay your other accounts, the banks going to want any significant savings and they're entitled. Pay the credit cards they're going to max out the rates as soon as the short sale hits your credit report.
Bill
Bryant--Howdy stranger! This is way too scary when people are in trouble in the first place. Thanks for the heads up.
Wow. I am shocked. I am off to read the post you cite, and just wanted to says thanks for the heads up on this....and why am I not surprised to hear BofA mentioned in this?
Something else to remember when listing short sales. I didn't know they would do this.
BB...
Just when you start to think that things can't get any crazier. Wow.
Hi Bryant... Sadly, after nearly 6 years of doing Short Sales, the only thing that surprises me about this, is that it has taken this long for things to get to this point. It should be against the law.
I'm not surprised. I don't know about the legalities either, but this is something I've actually wondered about in the past.
Hi Broker Bryant,
Thanks for the heads up. Why is it that I'm not surprised that BOA is one of the prime culprits?...Ok - let's not go there. Unfortunately, my own mortgage is there.....Realtor heal thyself!
Wha Wha Whaaat ????
Oh brutha, it's gettin' bad huh .....
I hope this doesnt become commonplace, and what will these seize next ? All hell could break loose.
All the best to the wifey, hope she's feelin better now :o)
I've heard that this was possible. Thanks for pointing this out, we'll need to talk to our short sale selers about this.
They have all those poor executives that need their bonuses.
Broker Bryant, Thanks for the heads up. Why doesn't this surprise me, especially with B of A?
The root of all evil...the almighty dollar. I think I would have already pulled my money out if I had a short sale going on, but who would have thought the banks would actually do this?
Nathan,
If people read the contracts on their checking and savings accounts they'd know this was possible.
"I think I would have already pulled my money out if I had a short sale going on" Most do, most people are honorable and try to pay before defaulting. This is the reason we don't see more of this, followed closely by the mortgage servicer not owning the note.
It keeps coming back to people thinking their entitled to the banks money when the truth is the bank is entitled to the return of their money! Short sales are a great tool for the bank and a blessing for the debtors that qualify.
Bill
This does not really surprise me. My son had the same thing happen with a car he financed though BofA. Lesson learned for him at a very young age! Good information to share with consumers that are in situations with their mortgages.
Thanks for the comments. I am reviewing some of my mortgages right now to try and find the section that addresses this. I have no doubt that they can do it it just hadn't crossed my mind.
Bryant,
Not your mortgages or even your notes! It's your checking, savings and any other deposit accounts with the same company that owns the mortgage in default,
Bill
As soon as I started reading I thought BoA and yep there is was... ~Rita
I'm glad that you wrote this post. I have actually had a few clients that have experienced this--but not with B of A. It is more prevalent (at least in California) with the local credit unions. Moral: Don't potty where you eat. (Pardon the less than appropriate language in the last sentence.)
You are a terrific individual. This is crucial to several of our sellers. I so appreciate it. I had not caught this on Sally's blog.
Great info, thanks for taking the time to post to us all!
Holy Crap.
And Again, I Wonder.....When the hell are we going to see some of these lenders hauled off to jail??
This is so important to know. Hopefully we can help this from happening to other short sellers by getting the word out. Thanks for sharing this warning.
BB - Great info indeed. But, I am confused about how anybody can even expect to claim a financial hardship and ask the bank to authorize a short sale when they have the assets to offset some of the deficit. Maybe you can clarify this. Of, course I always assumed the bank would want the homeowner to contribute what they can, and I would think it might even be the honorable thing to do. Kind of sad for the homeowner who is left with nothing, but kind of the right thing for anybody to expect given that they're asking for the banks to take a loss and be completely in the red. I am not trying to be unsympathetic, but isn't a homewoner who is not expecting to make a monetary contribution towards the short sale when they have the money in a sense anticipating some form of charity?I'm just not sure I know how to feel about this situation.
Hi Carol. Are you taking the BB tour today? :)
Carol I struggled with this as well until I ran across more and more sellers like this one. I just had him pull his last $18,000 out of BofA and place it in another account. If they took this money he would be devastated.
Bryant, this is so important to let people know about. We heard about it last summer in time to help some folks move their buckaroos to another bank.
Great information Bryant. I hope this news gets out to all the short sellers that are currently out there.