I have just sent an email by Bank of America stating the information below; am I missing something here, we provided a Quit Claim deed to prove the seller was actually the "entity" he transferred the property to a business name after he initially purchased it.. Then we provided a quit claim deed transferring property into the sellers name? I have never had an issue like this before, need a little help. Also BofA will not provide any written documentation backing up there decision, as usual. Nor will they give me any more information as to what they are looking for to get this file approved.... I feel like they are forcing the seller into foreclosure.. thoughts??
Body: After an Internal Quality Review the file will be declined and moved to unavailable in 48 to 72 hours. Our borrower has transferred the deed to their property to another person/entity. A short sale will no longer be offered for this property. No further action on this transaction is required. Thank you.
Try calling the office of the president or tweeting bofa_help. You will probably need to work hard on this because BOA makes money by holding onto accounts, not short saling them. They make money on foreclosures and then holding them in their REO. They will look for reasons to kill the deal. If your investor is Ginny Mae, you're sunk. They are strange and I know of a case where it was proven that they did not notify someone of a deadline - proven - and they will never allow a short sale for that property because of that "missed" deadline (So, they would prefer to lose more money for the investor than do a short sale..??). Freddie Mac seems to do things which make no sense at times, too.
You need to make them care that they are forcing their boss, the investor to lose money by refusing a good deal. You probably also need to make them feel that this is an ordinary seller, not someone playing real estate games here.
We are on thin ice with short sales - servicers make money by killing them while "cooperating" to do them. The investor has no requirements to do a short sale - everything is on their whim. Good luck!
As Joe said, if you know who the investor is, i.e. Freddie or Fannie, I may be able to help you with some good contacts. If the investor is Freddie/Fannie, connect with me as a friend in this forum and I can get the info to you. I would also email the President at BofA, I can provide that to you also if needed. I prefer an email to a tweet as you have more space to clearly explain your situation.
Best of luck to you on this one!
This may open a whole can of "worms" for thousands of distressed homeowners in Deed states and Realtors..
First let me say, I respect what I was told by Bank of America and appreciate them taking the time to look into this matter.
I received a call from two reps at BofA, one gentleman who never introduced himself and a female. The files have been denied and BofA took them out of Equator.
In Colorado we do have some language written on our Deeds that says no title transfer unless the property is paid in full. So my understanding is that if a person or entity changes title without notifying the bank, as I was just told by the female at BofA, it is "illegal" and the loan would be accelerated and payment due in full. I did ask why BofA did not enforce this at the time,(several years ago) they stated because they were not notified.
I asked many questions and gave scenarios like, divorce taking one person off title, the gentleman stated this is court ordered by a judge so, if a judge orders a title change then that supersedes the banks Deed? hmmmmm-
Another scenario, "Joe& Mary Smith" on Note and contract but at closing change to their "Trust" From my conversation today this should not be happening.
What about adding "jr" , "sr" later, a name is misspelled ect... well this shouldn't be done either.... at least on our Deed's and other states with Deeds.
and as for right now the hundreds if not thousands of homeowners that have changed title that may need a short sale, according to Bank of America, they will not allow them, they will be denied.
and I will now be adding another question to my distressed homeowners. "Have you ever changed title, or Quit Claimed the title to your home?"
Lastly after speaking with the seller, he was advised by an attorney and CPA to put the homes into a business or LLC. I am guessing this will also affect how attorney's and CPA's give out advice.
I am putting together a round table in Colorado, Real Estate Attorney's, Title Attorney's and some others. I don't want anyone else to run into this and be surprised as I have been.
I had never heard of such an addition to a state's deed. That is sort of cutting into a fundamental right to own property and do with it as you wish, including breaking it up, separating mineral rights, air rights, etc. In real states, I can put just about anything I want into a deed - say a pool table must be left in a certain location or a path must be allowed for my uncle's secretary to get to the pond. (Or as is often, water pipeline right of way, etc.) But in CO, no? I doubt that what you say is true.
For decades, most banks have had in their mortgage/note say that the bank can call the note due if you sell the property - that is not the same as having it in a deed or even saying that you cannot sell it, just that they agreed that you would pay for the property and they don't want it going to someone else when they checked out you, not someone else, among other reasons. It is NOT illegal to sell the property, you have legal consequences - that is a contractual obligation - nothing illegal there. I'm also guessing that you were not talking to a BOA lawyer but some people who frequently like to interpret things however they want w/o consequences to being absolutely wrong - basically, don't necessarily trust anything you hear from a BOA employee - they will often say what they think will fix things their way. Often these edicts disappear when you simply ask for "it" in writing. Oh, can't do that. Oh really?
I suspect that although they will claim anything expedient to get their way, if you have your attorney send them a QWR or similar demanding that BOA officially stipulate that they have NEVER done a short sale for anyone who transferred a property into his personal business, you will get a stone wall - At this point, you're talking lawsuit and BOA has lawsuits coming out their ears - they don't care, they laugh it all off. As witnessed this last year when they ignored a judge order to pay for expenses when foreclosing on a property that they did not own.
I suspect that your sellers have no attorney give them that advice or they could hold him liable for creating this problem. Make it the attorney against BOA. How about some late night ad "attorney"?
Trusts are used for estate planning. You can sign your ownership over to a trust (unless as you say, there is this crazy law in CO - which I have not seen). This is probably done much more frequently for subject-to arrangements - to keep the bank out of prying. The bank can only look at your trust with a court order - banks don't get those. Banks have been told to accept estate planning trusts and bug out - and they almost always do. I had 1 letter from 1 bank about 1 property during the years that I was doing this very thing. Ignoring it made it go away.
Now, if your state deed actually had such a stipulation, you can go back to BOA to point out, by their very words, that the property was not transferred because the transfer from years ago was not legal, therefore void - they have no case that it changed hands - it legally did not (but, I doubt CO has that deed stipulation - you'd have to use their fact free argument, I think).
You might ask them what they are gaining by playing this game - forcing your seller into foreclosure (while he loses interest and lets the property fall apart), getting back a property worth a lot less than this current deal - how is this good for anybody but BOA continuing to collect money while reducing return to the investor.
Some investors will help you, and in this last week, after someone's suggestion because of a bad situation, someone succeeded with a senator's help. Other investors are nutz or fed fakes (come on, fnma, freddie really care or help the taxpayer or the homeowners or the economy? Really??). It could be very useful to know who your investor is and if they have humans on board, possibly get somewhere there.
You don't know if you really have an investor guideline about this or some pinhead at BOA playing footsie with you. I have had to get quotes from HAMP and go to escalations to get a negotiator to change his ways after weeks. My point is that just because you are right, don't expect them to roll over and do the right thing, you often need fortitude, too.
Joe, thank you for your response.
I asked many of the questions and concerns you brought up. I asked for written documentation. I have taken this to a few attorney's and am awaiting their responses.I have advised the client to seek their own legal advice as well.
I have also spoken to another agent in Colorado, they had a clients modification denied and the reason given was because the title changed. This title change was court ordered by a judge. They provided the court documents and they were still denied.
I will continue to work on this and get some answers. I am told there are several Deed States that may have the same type of verbiage. So this is probably not just a Colorado deal. So anyone reading this that may be in a Deed state, take a minute to read them.
I will double check the investor. I don't remember it being Fannie or Freddie or I would've used the Fannie Mae help desk already.
You or no one else in this thread has never heard of the due on clause or the very aged legislation that brought it into being? Really?
Your response wasn't particularly helpful, Anon. Would you care to elaborate? Just for the record, I have heard of the due on "sale" clause but your vagueness as to the "aged legislation" is a little too ambiguous to answer. Really. :-)
Aged means old. The legislation is not new.
It isnt vague at all if you stood back and took time to understand the legislation it is very specific.
The moment your client transferred the title a number of things happened that both you and they seem to be unaware of. The most salient ones from your point of view right now are these:-
1 The note became immediately payable together with any penalties and additional interest that are note specfic.
2 The original homeowner (note the use of the word "original:) is in breach of covenant and no longer owns the property, ergo they are unable to sell (be it short or otherwise) a property they do not own. Think about it for a moment.
That is not ambiguous at all it is well settled in law for over 20 years.
Let me put it another way, if you have a note on your car and sell it without the knowledge or consent of the noteholder what exactly do you think will happen to you and the hapless buyer? Hint a house is no different.
As for the people who suggest that it is ok because an attorney told you it would be fine I would caution there is a reason why an attorney has to carry malpractice insurance.
Yes there is a little more complexity to it than the above but in general terms it is a good basic grounding as to why you now have a problem.
Complain to whoever you want but there are two basic problems you are all ignoring 1 the homeowner is in a mess of his own creation and 2 there is no contractual right to a short sale with any bank. Complaints will certainly escalate it to the point where you get told NO quicker in the particular set of circumstances you describe.
Outrageous indignation has its place in life but not when a homeowner has perhaps put themselves in the position of fraudulent conversion. The note-holder didn't do that the homeowner did all on their own.
And yes I know that answer may not be viewed as helpful by you either, but reality has a nasty habit of being inconvenient.
Actions have consequences is the bottom line, and no amount of complaining or e mails is going to persuade a bank to ignore the law.
Can it be fixed? Perhaps ( some are easy others more difficult if not impossible) Yes but with respect attorneys do not sell house so they probably expect in return that realtors do not practice law. ;>p
On a more serious note I understand your frustration (you are not the first to unwittingly find yourself in this bewildering situation nor will you be the last) but hopefully the above has made the muddy waters you find yourself in a little clearer. Good luck. Sometimes it can be fixed others it can not.