We've been working for a homebuyer since June trying to close a purchase.
He thought he did everything right BUT you can't account for "out to lunch" sellers or their "not so helpful" bankruptcy attorney. [I'm being really kind with those quotes cause these folk have made lots of grief for everyone. More appropriately I might have said, "out of touch with reality - perhaps in a drug induced haze and don't give a darn" and "not really that busy but push everything on my paralegal anyway who isn't an attorney and shouldn't be fully managing my caseload but I couldn't care less"]
Okay, our buyer knew the sellers were in trouble and facing foreclosure. The sellers had purportedly discussed a short sale with their lender and so the buyer made an offer and made his plans.
First of all, let's remember that anytime you hear the phrase "short sale", no one should make plans, okay? What everybody should do is dot all the i's and cross all the t's, keep copious notes, plan to have lots of patience, then wait. If the sellers are already in foreclosure your short sale offer will have priority in loss mitigation, however that doesn't mean it will fly or move fast. It simply means that from the mortgage lender's perspective, it's a more important transaction. Everyone else is a lower priority.
In this case, the sellers had NOT disclosed that they were in bankruptcy. We discovered this little helpful piece of information when we did our title examination. It's a Chapter 7 and not yet discharged, SO we ask the attorney to get a court order approving the sale.
Mr. Lazy Bum [being kind] Attorney won't lift a finger because he's been paid and doesn't care to assist anyone. We report this to the real estate agent and word gets back to Mr. LBA and he runs to embrace the broker who is a buddy and say it isn't so, this bankruptcy will discharge in less than 30 days so why force me to do this extra work. We talk with the trustee who says it will discharge in 60 days. Nobody wants to believe us and so they wait.
The 30 day mark passes and now we are believed but still Mr. LBA says not gonna help and sellers can barely hold a conversation so buyer decides to wait for 60 day mark. Rate lock will expire on the 60th day, but we'll make the effort and get everything ready.
In the interim, we have gotten preliminary approval for the short sale.
Yesterday was the 60th day. It didn't close though lots of effort and fancy dancing took place. I must say I was impressed by the patience of the buyer and his ability to jump in and team effort the hurdles we needed to work out.
The lender provided documents and funds. We had a last minute snag on the short sale final letter. The preliminary approval called for final okay on the final HUD and though we submitted it 24 hours in advance, the lender told us at the last minute that their attorney had to bless it and he was "out" and "it ain't gonna happen today" and as you know the rate lock was expiring so....
While we waited for the discharge to show up in Pacer - online access to bankruptcy data - we worked like mad dogs trying to find a friend and a solution. Trying to reach a supervisor in loss mitigation got me a rude hang up by some bloke who said "You have to talk with the attorney." Getting nowhere trying to work up the chain, I decided to go down from the top. I did alittle research on Google and found a contact - EVP and some other folks. Shot off the HUD and a polite e-mail hoping for a reasonable response and WE GOT IT! The EVP impressively cared and put me in touch with a senior officer in collections and interestingly as I was in e-mail chats with him, our buyer had him on the phone. We were both working any angle we could find and we both found the magic guy. He helped but the short sale was of course subject to a court order approving the sale or discharge of bankruptcy.
We kept checking Pacer - nothing. Our buyer had found a contact - the actual person who would type the discharge into the docket. [I'm telling you this buyer is resourceful and a pleasure to work with.] The trustee's office couldn't figure out why the discharge hadn't posted but they really couldn't directly help. Through the trustee, I was able to talk with the case manager. The case manager gave me bad news. Mr. LBA had filed an additional document after the sales agreement for the real estate which bumped the entire discharge process back another 23 days.
Mr. LBA - You stink.
Mr. LBA - You can't get off your lazy - whatever - to ask the court for approval for the sale.
Mr. LBA - You won't responsibly perform your duties to your clients, you lied to us, you lied to the Realtor and you can't manage the "100 files" I heard you yelling about in the background while your secretary tried to lie for you and say you were with clients.
Mr. LBA - We'll still close this transaction. You are causing hardship to people but I know you don't care.
Mr. LBA - Your demeanor and methods - as a former underwriter and someone who is trained in fraud prevention - smell like trouble to me. Someone ought to visit your office and take a peek at those books.
Anyway, this post turned into a novel - so sorry, but I do think discussing real cases is helpful.
As an aside, I should note that the buyer's new mortgage is VA. The house had the ole "doors to nowhere" problem, you know, sliding glass door in the wall but nothing on the outside of the house. That's a safety concern for the VA and so they require that you either put a porch out there or make the doors unusable.
Early in the transaction I happened to find out that the buyer was moving forward to put a deck up BEFORE closing. I said, look, you have no idea if this transaction will close. As a former VA underwriter, I suggested he ask if a simple railing/bar installed over the door would pass muster. He argued that he wanted to put up the deck and didn't want to spend the extra cash to put up a railing that he would be taking down later. I said suit yourself but putting up a deck is a bunch of money and what if somebody dies or what if the house burns down - you never know what might happen to prevent a closing. In risk management, you must always consider the worst case scenario before making decisions.
He did the railing. ;)
One more thing.
I love my job.