Well Bank of America did it again. They foreclosed on a home owned by a single mother of five children, one a newborn last Monday after we were told numerous times that her short sale was approved.
This hard working mother of five commutes to work every day from Victorville to Manhattan Beach, a 103 mile one-way trip in order to keep a roof over her family’s head. With the job market in such a slump she cannot afford to risk her current employment and has been making this commute for nearly 4 years now. Until now.
She attempted a loan modification with Bank of America two years ago but was declined. She attempted the process again only to be turned down for allegedly not returning her documents to the bank by their deadline. When we met her earlier this year, her loan was not in default yet. With the news of her recent pregnancy, she began falling behind in her mortgage payments.
In April 2011, we listed her home in attempt to short sell it so that she could retain some hope of home ownership again by making every effort to avoid foreclosure. I am a HAFA certified real estate broker trained to work out short sales. She was a prime candidate for the program.
In May 2011, we received a full price offer on her home at $99,000 all cash. She was also served with a notice of default that same month from Bank of America. We tried to assure her the best we could that the short sale would be approved and not to worry about the bank foreclosing on her. We had plenty of short sale negotiations on homes with Bank of America that have been postponed for months if not years before the threat of foreclosure.
After submitting her complete short sale package, the new offer and estimated HUD-1 through the Equator system, we received a counter offer from the negotiator basically accepting the terms of the purchase agreement with some minor tweaks. The closing date was to be completed by September 23, 2011. Not a problem. We accepted all the terms. This was in July 2011.
This process was moving along quite quickly in comparison to other files we have worked. But no indication of any red flags or reasons to question the system. After submitting her most recent updated pay stub and bank statement, Bank of America stated that they were waiting on final investor approval before we would open escrow.
On August 10, 2011 she received a notice of trustee sale notice posted on her front door. The sale date is scheduled for September 6th at 9:00 a.m., the day after Labor Day (no pun intended but ironic since she just gave birth to her new baby boy).
We began to call the negotiator immediately in an effort to postpone this looming sale date in light of the short sale approval we were waiting on. Bank of America assured us that the foreclosure date would be postponed but that it may not show up in the system until three days before the sale date. We called the trustee directly to verify that the sale date had not been postponed yet. On the first of the three days before the sale date we began to make repeated calls, email requests, Equator notifications regarding the pending sale date. Each time we are told that it should be postponed at any time. The trustee notifies us that an opening bid has been published for $64,000. What? How could that be possible when Bank of America is working on the $99,000 all cash offer we submitted two months ago? It must be a mistake. We kept calling.
Bank of America did not postpone the foreclosure sale as it promised to do. The home went to sale for $64,500. Oddly enough, it was not purchased by a third party. It reverted to the beneficiary to be sold as an REO. Fannie Mae failed this hard working woman, Bank of America failed her. And ultimately, we failed her miserably too.
How could this happen? What could we have done differently? We are attempting to contact the asset manager for Fannie Mae to inform them that we have an offer for $99,000. Bank of America told us that it would take a few weeks for the property to be assigned. I didn’t believe that and was correct when I was told that Fannie Mae introduced himself to my client by knocking on her door with the news.
My head is still spinning with ideas and attempts to understand why this home went to sale without a single postponement when so many others we have with Bank of America are declared “cancelled” for other unknown reasons. I’m furious and saddened by this foreclosure system we are forced to bargain with. Any thoughts?
****DIANE WHEATLEY IS NOT A LICENSED ATTORNEY. THIS INFORMATION IS COMPRISED OF HER OPINIONS, OBSERVATIONS AND INTERPRETATIONS AND IS NOT INTENDED TO BE CONSTRUED AS LEGAL ADVICE. PLEASE CONSULT WITH AN ATTORNEY BEFORE RELYING ON OR TAKING ANY ACTION BASED ON THE INFORMATION PROVIDED HERE.****