Orlando Short Sales and the Banks you can't trust...
A few weeks ago I blogged about how Greedy Short Sale Banks were....boy, was that an understatement! Today I say: Banks are liars. They say one thing and do another...they agree to something and then back peddle...you absolutely cannot trust anything that they say!
New SHORT SALE FIASCO: A Short Sale property receives an offer...there are two mortgages on the property; a first mortgage and a second mortgage. Several months after the offer is submitted, the bank finally counteroffers the short sale at $320,000, a higher price than the buyer's offer, so the buyer walked away and bought something else.
The Banks approved short sale price of $320,000 included a settlement of $7,700 going to the 2nd bank (second mortgage holder) to make the short sale work. Both banks agreed that out of the $320,000 short sales price, the 2nd bank would get a pay off for the sale of $7,700 and the balance would go to the first bank.
Lets face it, if the banks don't agree, the property is ultimately going to end up in a foreclosure...which would net the 1st mortgage holder less money, and the 2nd mortgage holder would more than likely end up with nothing....no money, zip, zero, zilch. So both banks agreement to a short sales price price of $320,000 is in place....or so everyone thinks.
As mentioned, the first buyer walked away, and the Short Sale Property is put back on the market as an "approved bank price" of $320,000.
Along I come with my client...property looks good, price is fair and we are told that the bank and the mitigator is on board to move the property quickly for $320,000...perfect, we can close quick... my buyer is willing to pay full price, the $320,000 ALL CASH...can't get better than that.
So, now we wait and wait and wait some more...now in the 8th week, the first (Bank) mortgage holder now renege on the agreement. They decide that they are now only willing to pay the 2nd (Bank) mortgage holder $4,700...$3,000 less than they previously agreed to. Meanwhile, the 2nd mortgage holder is not willing to accept only $4,700 even though if they don't agree to terms, they will end up with "0" dollars.
WAIT! HERE IS THE BEST PART: the seller who is now sick of the whole ordeal, agrees to come to the closing table with $3,000 of his money to pay off the amount that the two banks are fighting over...but they won't let him.
Let me repeat this in simple language:
1. 1st mortgage holder wants $320,000 and agrees to settle the 2nd mortgage for $7,700.
2. After getting the $320,000 the 1st mortgage holder changes the terms offered to the 2nd, lowers it by $3,000.
3. Seller in exasperation agrees to pay the $3,000 that the second mtg holder was promised.
1ST BANKS RESPONSE IS...." NO WAY!, if the seller can beg, borrow or somehow get his hands on $3,000 WE WANT ALL THE MONEY!!!!"
UPDATE: Weeks go by with no response from the bank...meanwhile the seller no longer has $3000 to contribute...however that bank now decides they want $7000 more. The buyer agrees to raise the purchase price by $7000 to make all the numbers work...problem solved, you think?
Think again...now that the both banks have everything their way...and getting every penny that they requested....1st Bank not willing to approve the HUD (closing statement) because the 2nd mortgage holder is getting more money than the 1st bank thinks they should and they say "SORRY, WE WILL HAVE TO FORECLOSE". The foreclosure date is 30 days away, but yet the bank has already changed the locks...how does someone that does not own a property have the right to change the locks? If you and I did that, we would be arrested for breaking and entering...but the banks can do anything they want...
True story, but not isolated; there are many more cases just like this. These are the banks that got all that "bailout" money...to bail out who?
Not only are these short sale banks greedy and unreasonable, their word means absolutely nothing...Orlando Short Sale Banks are not to be trusted!