In my original blog post, my seller's bank (one of the big 3) foreclosed on the short sale with an approved offer in place. Needless to say I was furious. This was the second time in the last 30 days that this same bank did this. The first time my seller went with his lawyer to seek help. This time I went at it with the bank. I used my contacts and knowledge to get to the investor and get the result the seller and I wanted.
What I mean by all that is the first time this happened the bank sold the home on the steps of the court house for $170K. Far less than the $195K Cash offer that I had in place. This time no one bought the home at the court house. When that happens the bank buys it for $100. It's still a foreclosure but now the bank is the owner.
The banks are just the processors for the file. Then there is the investor that owns the loan. Usually the investor does not know how the banks are handling the files. They are not made aware of higher short sale offers during a foreclosure. This is one of the main reasons that so many people across the country are upset with these banks. By the banks foreclosing they cause more hardships on the troubled homeowners. They are also driving down the values in the neighborhoods of these homes they foreclose on.
So what do you do when this happens? Many agents would just through the file in the trash. Not this guy oh no. You get on the phone and the email and call everyone you know at the bank. You get the contact info of the investor of the file. The bank has to give it to the seller (at least). They could petition for it under the Fair Credit act. They need to put it in writing and submit to the bank and it usually takes 7 to 10 days to get it. Unless you're That Short Sale Guy (shameless plug) and you know your contacts and rules of short sales. Then you can usually get the contact info within an hour or two.
Now what do you do with that info once you have it, you ask? You raise Holy Hell on them. You submit your Loss Severity calculation and prove to them that they have just thrown away a lot of money by foreclosing. Once you have made your point. They will usually take it under advisement and get back with you within one to three days, so they say.
In my case it took almost two weeks and I got a call from the head of the Foreclosure department, telling me that the foreclosure was reversed and I needed to get the buyers updated info and continue with the short sale.
Yes, it can be done if you know what you're doing and are working for your client and not the bank. Sure you only get paid if you sell the property but your helping the seller get out of a really bad situation and isn't that what it's all about anyway?