Advice needed! Cooperative Short Sale problems

**TampaBayGirl** · 01-17-2012, 07:39 PM

Where to start? I am a California resident who has a home in Florida. It used to be my primary residence until 2007 when I got a job in California. Since then I have intermittently rented it out. This fall when my tenants moved out first I thought I'd let the house go but then decided I'd seriously try for a loan mod.

I spoke with an attorney who said for $3500 he could get me a loan modification but I would have to stop making my mortgage payments. I already knew that.

Meanwhile, 2 different realtors were unable to find tenants for my home, so by December I was ready to stop paying. In October I had shoulder surgery, and have been on disability earning only 60 percent of my normal salary. I anticipate that I will be on disability for 4 months.

I sent the attorney all of the paperwork before the Christmas holiday but they weren’t going to start working on it til 1st week of January. I didn't like it that my mortgage wasn't being paid and nobody was communicating with Bank of America so I called BOFA the week before Christmas. They took my financials over the phone and told me I might be eligible for one of their loan mod or short sale programs.

On January 4^th, I was told I didn't qualify for a loan modification, but when I spoke with the short sale department I got great news. I was told that they had a new program in Florida called the cooperative short sale. The women read me a statement describing this program the highlights of which were that there would be no deficiency judgment, they would pay up to $6000 to settle a 2nd mortgage and up to $2500 in relocation fees. She qualified me for this program over the phone, told me that I needed to pick a realtor and have her log on to the equator system within 24 hours to have her name added to my account. I called the attorney and told him I wasn’t going to need his services.

I chose my realtor who is very experienced in short sales and she tried for a week to get her name added to my account, but got the runaround. At that point I called Bank of America again and the person I spoke with said to me that we had missed the deadline to add a realtor and my account had gone to collections and I would have to wait for my negotiator to get involved before another window would open to have my realtor added to the account.

My realtor was proactive and reached out to the negotiator. Today he answered her by e-mail and copied me saying that I didn't qualify for the cooperative short sale and he was denying our request. He has never spoken to me or requested or seen proof of the financials I initially supplied over the phone.

What do I do now? I let the attorney go because the cooperative short sale seemed like something I could handle on my own. As of today, I’m 60 days late on the mortgage, my credit is shot, and I have no plan. Is there a department I can complain to? Or was their plan all along to pull the rug out from underneath me at the last moment?

Any help greatly appreciated!!!!

**TomEason** · 01-17-2012, 10:07 PM

TampaBayGirl

Thanks for your post. You, no doubt now understand why SSs are considered a complete hassle, and not worth enduring the ordeal, particularly since the seller isn't allowed to make any $$ for all the hassles. Fewer than 50 percent of SS transactions ever successfully close.

Here's what I'd do. I'd immediately stop paying the lender and the property taxes. I'd re-rent the property (you can do it if the rent's low enough - I recommend you use Craigslist). No matter how low the rent, you'll enjoy positive cash flow rental income because you won't be making payments on loan, property tax, utilities etc.

And you'll likely enjoy this rental stream for as long as two years (FCs in FL are taking that long). You'll be making a good chunk of cash; whereas with a SS, you'd make nothing.

I wish you the best!

**Cat Damiano** · 01-17-2012, 11:31 PM

You may get more responses to your additional questions if you keep them in your original thread.

Short Sale or Foreclosure? Need Advice

**TampaBayGirl** · 01-18-2012, 07:49 AM

Thanks Tom. I haven't made a payment in 2 months, that's why my credit is now shot. I'm 3000 miles away from that home so I cannot personally rent it and realtors are worried about their liability renting out a house that is in foreclosure.

The beauty of this new program, the "cooperative short sale" was the fact that they'd forgive the deficiency in writing, and pay up to $6,000 of your second mortgage and pay $2500 to help you leave. I have a $5,000 balance on my second so I stood to gain $7500 and finally get out from under this sinking ship.

**TomEason** · 01-18-2012, 09:29 AM

Hi TampaBayGirl

Thanks for your update. About renting. Don't use a realtor as a property manager. If you cannot rent it yourself from afar (and BTW you can - it's not that difficult), perhaps you can find a local FL friend or colleague that will assist you.

As far as the co-op short sale program, do you have a plan to show BOA that you still occupy that property? If not, how will you qualify for the $2,500 relocation assistance?

IMO, the only way to ever see any actual cash $$ in your fist is to rent the property (or challenge any RE agent who wants your SS listing to come up with a legal way for you to make some $$ on a SS deal).

You statement

I stood to gain $7500 and finally get out from under this sinking ship

is misleading. You would likely gain nothing you couldn't gain by walking away. And you'd certainly gain lots more by renting.

Good luck.

**TampaBayGirl** · 01-22-2012, 10:53 PM

I'm going to update this in case people want to compare their experiences. Since I last logged on I got a call from my customer relations manager, "my single point of contact". He called to offer me a loan modification! Three sentences into the conversation, I realize what he's offering me is a payment plan to catch up on my delinquent payments. I say no thanks.

Next, he conferences in the short sale dept to supposedly get my cooperative short sale into equator correctly. We discussed the cooperative short sale at least 5 times and every step of the way I kept confirming that they were putting me into the co-op program.

An hour later my realtor called asking why I went into the hafa program. They emailed her to log into equator and confirm she was my realtor. I don't qualify for hafa for numerous reasons. I called my crm and he never returned my call and by Friday I received a hafa application in the mail. They are either so sleazy or so stupid!

And in case anyone is wondering about how soon your credit is effected, I'm moving and my new landlord pulled my credit report through equifax. (I was honest with the landlord about my situation in Florida) I'm 60 days late and Bofa still hasn't reported to Equifax.

**babsy** · 03-15-2012, 04:49 PM

I was contacted today by Bank of America about the cooperative short sale. This shortsale is regards to my rental property that I have tried to modify and shortsale for a little over a year now. I haven't made any payments in a while since I can't afford to anymore. The representitive gave me the details of the program - no deficency judgment, would pay my listing agent and would also pay for relocating if I lived there. Within minutes I received a fax to acknowledge the requirment and I provided them with my agents name. Since my property has been listed for a while I already had that in place. The bank called me back this evening to set up an appointment for an appraisal to be performed on the property. This would determine the listing price. I hope this works out for me this time. Has anyone had success with this program.

**TampaBayGirl** · 03-15-2012, 07:10 PM

Funny you should reply today because yesterday, after many false starts, bank errors, and inertia on their part, I finally heard back from Boa's coop sale department. In my case, they are requesting tax returns, pay statements, bank statements, a hardship letter etc. I should have it all ready to go by tomorrow, it was a pain to put together but hopefully I'll qualify for the program. If I'm approved, then they'll move forward with the appraisal. Anyway, lucky you to sail by with no documentation! Please keep me posted.

**howtogetout** · 07-14-2012, 05:18 PM

Originally Posted by TampaBayGirl

Funny you should reply today because yesterday, after many false starts, bank errors, and inertia on their part, I finally heard back from Boa's coop sale department. In my case, they are requesting tax returns, pay statements, bank statements, a hardship letter etc. I should have it all ready to go by tomorrow, it was a pain to put together but hopefully I'll qualify for the program. If I'm approved, then they'll move forward with the appraisal. Anyway, lucky you to sail by with no documentation! Please keep me posted.

So what is the update? Would really help to know.

**TampaBayGirl** · 07-20-2012, 11:31 AM

I got an offer on the house within the first 2 days it was listed. From there I hired an attorney, mostly to make sure the deficiency was truly waived. A few weeks before closing I did have to submit my 2011 tax return (I had previously sent them the 2010). There were definitely more errors made but my attorney and realtor handled everything. In the end, boa paid my 2nd and gave me an $8000 incentive, which I hope will cover the taxes on the 1099 I will be sent next year for the deficiency. They also sent out a letter shortly before I closed that they were paying up to a $25,000 incentive for closing before the end of August. Let me know if you any specific questions.

**TomEason** · 07-20-2012, 11:58 AM

Hi TampaBayGirl

Thanks for your update and congratulations on having received an offer so quickly!

So to clarify, BOA will pay you $8K for closing, but if you're able to close before August 31st, they'll pay you "up to" $25K? If they were to pay you $25K that would be a great deal. However, the letter couches the incentive amount in uncertainty.

Can you find out specifically how much they'll pay you? I'd recommend you demand the put the exact amount in writing.

Good luck; I hope the transaction goes smoothly.