Short Sales- Countrywide changes their short sale procedures for the third time in the last 16 months. It seems they just do not understand how to get through the short sales they have stacked up on their desks. Now- which road do they take? Which way do they turn?
As you may recall the last time I wrote about the changes; Countrywide had decided to ship most of their files off to India for processing. Well, then came the problems. The employees there are trained to be like robots. They go down a check list and if anything does not fit the mold they deny the loan modification, deed in lieu or the short sale. This created a lot of problems because rarely is a file sent in totally perfect no matter how hard one tries.
We make sure we use a check list for our short sales but there are always situations in which all the documents will not be in the package. For instance, we have a seller who does not work and is not required to file tax returns so they would be denied because the tax returns would be missing. Instead of picking up the phone and asking us about our explanation for the tax returns they just deny the file.
Countrywide then decided that was not the greatest of ideas and pulled the files back to the U.S. but now instead of expedientely going through the files they decided to break the short sale files up into 3 departments. Now they will examine every single file and call the real estate agent or homeowner regarding all missing documentation. The file will remain open.
They can not even handle the complete files and now they will address all files! Hmmmm, I wonder how much longer short sales are going to take now with Countrywide.
We have 2 listings that have been going on for over one year with Countrywide.
The other important thing to know about Countrywide is that they treat each offer as a new file. We had one offer in, the buyer walks because CW takes too long, then we get the next buyer and can substitute the buyer. Well, unlike all the other lenders we work with, CW does not let you sub a buyer. The file with the first buyer has to be actually closed down and then you have to get a new file started!
Back to the back of the line! So while we can get an approved short sale offer through in one week with many lenders if a buyer walks; NOT with Countrywide! You are looking at another 30 to 90 days! WOW!!! Some improvement!
If your homeowner has a deed in lieu request or a loan modification open; you can not also work on the short sale. Those files need to be closed first. We have one with a loan mod that was declined but until we have an offer on the short sale they will not close the loan mod file. I wonder if this has anything to do with padding the books in any way?
Oh, another thing- Country wide will no longer accept offers without the sellers's signatures on them. We use this in order for us to accept multiple offers in certain situations. When I asked why that is, the team leader told us that the offers not signed by the sellers are creating buyers who are walking away from the deals in the middle of the short sale!
EXCUSE ME!!!! That has nothing to do with it. The buyers are walking because they don't want to wait 6 months to 12 months to buy a house!!!!!! What part of this picture do they not understand??? The buyers are walking because of the clause in the offer that says 'the time period for acceptance is 45 days' or whatever days is put in that box! That means Countrywide that if you don't give the buyers an answer by that time they do not have to buy the house!!! HELLO!!!
If they pay our fee; Nestor and I will go into Countrywide and organize their short sale department and make it run like a well oiled machine! It is NOT rocket science! But you do need to know short sales and real estate!
Hmmmmm, and banks want to be in the business of real estate! I think some public relations classes are in order!
Read our short sale series by clicking here.
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Copyright © 2009 By Katerina Gasset, All Rights Reserved.* Short Sales-Countrywide Changes Short Sale Procedures Again!
Katerina,
First off ....I've never submitted a contract to any lender without the sellers signature and all I can say is I have a few with them and they are taking forever...We finally got an approval on one and then the buyer couldn't qualify! now they kicked it back and won't even answer us.
They are the worst and will continue to be the worst. They have negotiators who just quit and leave. They have no idea how to successfully close them and that's why their website has so much inventory. I'm starting believe they would rather lose money selling it at foreclosure.
Katerina, Thank you for bringing this update to our attention. It seems there is no such thing as keeping one step ahead when it comes to Countrywide!!
Katerina,
You have more patience than I do. I would never, repeat never get involved with a short sale for a year. I think I would dig ditches first.
Evening folks, It just seems that some of the lenders are " Stuck on stupid ! " We no longer refer to these as " Short Sales" but rather as " Long Sales " !
Wow--It's like you are reading my mind! I'm in the middle of a countrywide short sale and took the listing in July. Got a buyer right away, but they ended up walking away after about 4 months because countrywide sat on their asses with the file. A month after the buyer left, we got our approval on that transaction lol. Property value has dropped in the last 6 months, and the original countrywide negotiator quit. Since then I've brought Countrywide 3 other offers, all rejected because Countrywide wants more than market value for the property. New negotiator says they need a higher price to approve. So what's going to end up happening here is we are going to run out of buyers and countrywide will net a few hundred k LESS when it goes to auction. I am amazed at how stupid this company is. They are really shooting themselves in the foot here.
I have always thought that these banks are their own worst enemy..and contribute to this mess...
This is incredible -- when you believe it can't get any worse, it DOES!
These banks need their heads examined! I have a buyer waiting 3 1/2 months now. We were told the bank wanted 1 more appraisal done - that was 3 weeks ago. I have seen the comps - there is NO WAY any appraiser could come up with a value more than we are asking.
It is nuts! The whole process makes me crazy!
Neal really hit on it. The lenders, in many cases would just as soon let it go to foreclosure, and won't match your effort. My pal Deana had a couple of listings that morphed into short sales and she is losing her mind. Wasting all her time with no end in sight.
How amazing. I had no idea they sent their files to india. I just took a countrywide short sale a few weeks ago, it looks like I will need a lot of luck.
Katerina~
That is good to know. We just listed a very nice condo in Aventura as a short sale with Countrywide holding the mortgage. I was counting on a smooth transaction...
Real Estate In Miami // Mott Kornicki // Associate | Broker
Aventura-The Waterways // Bal Harbour // Sunny Isles Beach • Florida
That's crazy - I'd be willing to go with you and help sort out the mess. We had one with them taking for ever and it ended up going sour because CW insisted that the home was worth more than it was and hence it didn't need a short sale? Not sure where those numbers came from??? And no matter how we proved the price to be what it was etc., it was all for nothing.... ~Rita
I lost two sales this week because of Countrywide and their "policies." One was a short sale and the other a repo. I am totalyl frustrated with their lack of time is of the essence and the WANT to sell these places. Both were good offers and now the short sale one is OFF the market with me standing with another buyer in hand ready to write another offer and they will not talk to me and tell me I must wait until it is listed again with an agent. I tried to convince them to let me do it and oh no they cannot do that they have a "process" and they have to go through the agent who handles that area for them... talk about BS.... I think we should make all lenders send a couple of reps to us or let us in so we can show them how to get the job DONE.
Short sales are such a backward process. You would think after all this time lenders would realize that they might be able to save time if they approved the hardship first, had the appraisal done and give the agent an approved price and condition listing that we could sell these things like hot cakes? I've just listed a new short sale and everytime I do I wonder when will they see the light?
After patiently waiting for over 3 months, I have a buyer walking on a short sale at the end of the month. The stupidity of Countrywide is disgusting! I am actually running away from any more short sales if it involves Countrywide. Is anyone having a closed short sale with these guys?
Interesting Katerina. Countrywide like many of the other servicers that have been caught with more inventory than thy ever imagined most definitely do not want to be in the real estate business. The problem is of course, they are overwhelmed. The rise in foreclosures is mind boggling and is only getting worse. I am not defending them, but mitigating the losses on these propoerties is a major obstacle. Perhaps, The Feds could step in a provide some relief in the way of taxes for the inevitable amount of money they are faced with losing.
Either way, there are no simple answers
Bo
OMG- seems the banks deserve what they have gotten! Too bad it is the homeowner and consumer who suffers.
I am just opening my first "short" escrow, representing the buyer. I have written many offers, but none of my buyers stuck around long enough to get into escrow! We have bank approval, only took two months after the first buyer walked- not bad! We are anticipating a 30 day close, and the agent on the other side has been great!! Makes all the difference.
Katerina - With all due respect, you know I value everything you say and including this post. But this post actually hit home with me because I have a very good friend, someone whom I look up to and respect works as a Short Sale Manager to help improve the process of these stuff. I am very sure it is not his sole decision, etc. but I do know that he works very hard to make things right for sellers, buyers and agents involved. Since he has been in the Short Sales department for at least 8 months now, I know his days are long. Countrywide and or other lenders do receive a high volume for these transactions and trying to get to each of them without a standardize cut off procedure can be difficult.
I feel bad for Sellers who are in these transactions. But because this post hits home for me, I do know that lenders on the other hand are doing their best also.
I'll get off my soap box now.
I thought I'd comment on your disclaimer at the tail of the post. Very interesting. Love to talk to you about that.
Why would you want to tell CW that the buyer backed out? Do they put buyer's name on their short sale acceptance letter? Or do they just accept the short sale, with a specific terms and conditions, without specifying the name of the buyer on it?
Hi Katerina; Good update on Countrywide. No wonder they are in such hot water!
It's funny, but that does seem to the the consensus for Countrywide and Short Sales. Honestly, its not as cut and dry as you think. Keep in mind that Countrywide does not make all of the decisions for these loans. In many cases, the loans need to be reviewed and approved by the actual investor. Yes, some go by FNMA rules (which those are the easy ones) but not all are that easy and clear.
Sure, they could use some modifications to their system and perhaps a new set of eyes coming in would help. But I assure you its not as easy as just 'sign here' and they are done. Its not Real Estate they are into, but they are into business to lose as little as possible. The first offer is not always accepted because some investors do not want to lose as much and/or want to be sure its bee on the market for a little while.
Consider the amount of loans they have and the amount that is currently in Foreclosure status. Those are the properties they review first typically. The highest priority are those that actually have a foreclosure date. Then, those in foreclosure, then those very delinquent, and then all others. Unfortunately, they will not really review the accounts that are current with their payments until they know they have addressed the properties in foreclosure. Although some may argue that this is not acceptable, it is to those that have a valid offer on a soon to be foreclosed property.
Sorry for the notes and they may not be very clear. I've always had a special place for the short sale department at Countrywide. I know how hard those people work first hand. I do agree that there are smoother ways the files could be handled, its just not as easy as one thinks it is. That just my 2 cents. :-)
John- I know that very well. We go above all their heads and have gone to the investors who BTW can be even more on some other planet than the servicer. I have written a lot of posts about servicers and note owners/investors, including ETRADE, the worst!, Fannie mae and Freddie mac.
But this post about CW is before it ever goes out to the investors for approvals and we are also talking about files that CW DOES have delegation powers over including some that they own themselves. Bank of New York and Etrade and Wells Fargo have a lot of their notes serviced by CW- but CW had NO delegation authoritative powers from them so it is even worse.
We have had the VP of CWshort sales accept an offer only to find out that the investor turned it down, she was in disbelief, now that house has dropped in value over 90K since he turned the offer down.
But that is all besides the post, I am writing a book about short sales and have 100 pages written so far.I could probably write 500! But I won't.
Anyways this post is about procedures at CW that are in place even before the investor gets to look at the file and before CW even checks the investor's criteria!
Shahrzad Malekpour- The HUD 1 settlement statement that you send in to the short sale department has the name of the buyer on it. Most all the other lenders we do short sales with allow up to sub the buyers with an updated HUD. CW does not. Countrywide treats each buyer as the file sort of, instead of the short sale as one file. I got this from the head VP of the closing department. They approve a buyer at CW. If you change buyers, they start all over again. This is their system.
Now we know a lot of the management and above at CW- but we only call for them after we try everything else, we don't want to be the one to cry wolf. Katerina
John- Believe me we know the short sale side on the servicer side is not easy. We have great relationships with the VPs and even Pres of HSBC and CityGroup, Citymortgage and Citybank, National City Bank, Bank United and even Freddie Mac as we have had to challenge BPOs that Freddie Mac has ordered. We have done enough short sales and developed enough relationships that when the front lines can not do their job or don't know how or turn into SOBs we go to the top, we get a call back usually within 20 minutes. We had the head of HSBC personally call us at 10 p.m. one night to say he is sorry for the negotiator we had, he even sent the sellers a letter of apology and admitted the behavior was unacceptable. SO yes, we know how hard their jobs are but we also know that it can be done much better. Systems in many of these places are archaic.
John- One more thing, sorry, I forgot, getting late here.
When you go through my short sale posts you will read that my rants are mostly about the agents involved not the lenders. The agents who do the BPOs are the biggest deal killers we have. I have written about that. Agents who do not even know our area come and do BPOs and have no clue what they are doing, trying to make a few bucks, that they could have made working at Starbucks for less work. They really get me because they have no accountability. At least have integrity and don't lie that you know the markets when you don't and don't say on the lender websites that you can do all of FLorida!
Cindy- In theory your suggestion of having a BPO done first sounds great but it actually will act as a double edged sword down here in Florida. If you get a price and then no offers for 3 months, the market went down in those 3 months and no one will pay what the price the lender will accept. They would have to do a new BPO anyways.
We have found it is best to wait for the offer to get the BPO from a seller standpoint. Since we work only with listings ( we do have buyer agents) we need to do what is best for our homeowners.
Katerina, Countrywide is very nearly the worst. Wells Fargo is nasty, too. Not only do they need public relations classes, they need real estate courses, too, since they are in the real estate business!
We worked with Countrywide on one, about 5 months, when they finally approved the deal, they gave the buyer 10 days to close. We set up the closing 1 day before the deadline to be safe, Countrywide wanted to approve the HUD-1 but would not answer the phone or emails, after leaving the closing table, an hour later a fax from the short sale manager came in approved. It's hard to get them to finish up their work so they can get their money.
Hi Katerina - I see what you mean. And you are right that your post is actually about the new procedure and not how CHL does not do their job. I agree that there are many areas of improvement (for example.. returning a call). I think my reaction was mainly to the responses you were receiving. Countrywide has taken a lot of heat for this industry, but its mainly because they are the biggest. They are not the only lenders that caused our current real estate situation but many feel they are. It just shows that those people probably only did one deal with CHL and the file was not in order, thus causing a delay. Unfortunately, there are many files that are out of order and they are clogging up some of the system. If the files were in order and docs all together, everyone else may move fast. That's obviously not the only issue, but that would help. Sounds like you have a lot of experience. If only everyone else could learn how to package a short sale, it would not be as bad.
Thanks for sharing the insight. Talk with you tomorrow?
Katerina,
Oh I can feel and hear your frustration and it is well founded. The problem is that the training of these organizations is like you said, it is a checklist. There's no thinking outside of the confines of the list that are encouraged. I am recalling a situation I had with a gentleman in customer service after 1 hour of system checking I asked him, bear with me a minute, can you please just follow me down this path for one second outside of your system. He listened, agreed with me that his system did not make sense, but it was what it was. YIKES.
That was just a phone system issue. Not a major purchase like a house.
Katerina,
That sounds rather scary. It seems there are quite a few lenders who are as confused as Countrywide and that just makes the whole real estate and mortgage mess fester on longer. What happened to good old organization?
Countrywide is utterly and completely clueless. They are by far the hardest bank I have dealt with. This post is not surprising.
Katerina, I felt I wrote this article. Except mine is Countrywide and thank God there was no India but all the rest is the same. I've been dealing with IndyMac Bank and I'm back to square one now that the buyer walked last week and the bank finally contacted me this week. All this has been since October 3, 2008.
"EXCUSE ME!!!! That has nothing to do with it. The buyers are walking because they don't want to wait 6 months to 12 months to buy a house!!!!!! What part of this picture do they not understand??? The buyers are walking because of the clause in the offer that says 'the time period for acceptance is 45 days' or whatever days is put in that box! That means Countrywide that if you don't give the buyers an answer by that time they do not have to buy the house!!! HELLO!!!"
couldn't have said it better!!! And yes, PLLLLLLLLease go and work for the banks and get them organized since they obviously have no clue and time has taught them NOTHING!
Katerina- I handle a lot of short sales of which I have 3 with Countrywide. Each one is so different, there is no consistancy with their procedure, one person says this while the other says that. I will be right by your side to help them run like a well-oiled machine. Too bad we can't teach them some common sense or maybe we need to give them a short sale book for Dummys....
Countrywide is frustrating..they have the first on one of our contracts and have taken 9 months to date....first buyer walked and the second has not been there for three months.....they are the junior lien holder and expect the most on one, and then they will not give more that $1500 on another one to the junior lien holder....talk about double standards.
And now Countrywide has an "assignor" to the phase I negotiator. So the assignor assigns, the phase 1 negotiator reviews, for 10 or 15 or 30 or 60 business days, whichever you get quoted when you check-in. Then it goes to Phase II, then Phase III.
Oh this is so scary. I have to write on short sales because they are 90% of the market right now.
I'm just plain tired of having to deal with their bull! Please someone help them see the big picture!!
Our buyers are in a CW short sale and the listing agent has not been the best at communicating. We are in our 5th month and from your blog we can understand why. Thanks!
I have been attempting to purchase a home in Massachusetts that has a first mortgage ($610K left on a $650) and a second home equity loan ($200K) both managed by Countrywide. I am patient but this is pushing my limits since I started in October 2008.
For background, the house was assessed at $1.2mm by the city, but that is way off. It is in poor shape. The owner had it listed initially for $1.125mm, May of 07. Then lowered the price a year later to $900K (what he originally paid). Unfortunately he had a divorce and bad business situation, so he tried a deed-in-lieu but that failed. He has not paid his mortgage for 11 months.
Finally I made my offer (the only offer he ever received.) Turns out Countrywide had a BPO of $1.4mm. Crazy valuation as the house was a wreck, no home had sold for over 1.1mm in the town in the last 12 months, and it has been listed for significantly less since May of 2007.
So I had the house inspected and I took a large number of pictures and created a detailed document of all the problems (5 HVAC units dead, leaky roof, hard water damage in all pipes and fixtures, buckled floors, etc.) Countrywide then said it had to be appraised and they sent an appraiser (who, by the way, works for them.)
The appraisal came back but they would not disclose the value (although I believe one operator let slip it was $799K when she was going through the file.) That is still much higher than the property is worth, but I suppose the appraiser knows who pays the bills. I then placed my second offer of $650K on January 3rd. Radio silence since then. It is with the "1st negotiator" who simply collects the docs.
So I cannot seem to move forward now. If anyone has an idea of how I can move this forward, I am all ears. Time is on my side as property values continue to drop in this area, but I would like to close on the home and start rehabilitation.