COUNTRYWIDE AND PROM. NOTES
ARGH!! I just finished about a 2 week long battle with Countrywide. They wanted the Seller to sign a promissory note to approve the short sale. This is of course after 3 months of getting to this point. After going back and forth with them and begging and pleading my client’s case they absolutely refused to approve the sale w/out the promissory note. I argued w/the negotiator and asked to speak to her supervisor. I confronted her and asked if this was a Fannie Mae policy, a Countrywide policy or her personal policy. I asked to speak w/her supervisor. She did call me and confirmed the above. Keep in mind their loss on this was 52K which in our market is small comparatively speaking….Anyway my Seller did not want to sign a note. The note was not large and they said that they took everything into consideration with the amount as well as the term. The buyer really wanted the property and buyer’s agent asked me to propose to negotiator that the buyer come up w/the amount.
So guess what folks? Are you ready for this one?………..Negotiator says that if buyer wanted to pay another “X” amount that was fine but that they WOULD STILL NEED A PROM NOTE FROM THE SELLER!! This is obviously not about the money!!! So we don’t have a deal and it seems they are perfectly willing to foreclose on this house and you KNOW it will cost them more than the original loss! They want blood from the Seller!!!
Since the Supervisor tells me that this is indeed their policy and they take each case into consideration before assessing a prom note. Basically if you aren’t out of a job, or don’t have a medical hardship they are going to ask the Seller to sign a prom note.
So what now fellow Realtors? Do we advise all our Countrywide client Sellers to get prepared for the possibility of a prom note? If they are not willing be prepared to take the foreclosure instead? Or will it all change next week?…..
Comments please!
Sincerely,
Elise Fay & Deidre St. Romain
John Hall & Associates
Glendale AZ Short Sales
{ 2 comments… read them below or add one }
Argh x10! I just rec’d the exact same situation as Elise described above. What surprises me is the difference the short sale offer and the appraisal that Countrywide/Bank of America received (fair market value) was only a few thousand (maybe 5k). BOA is saying that the MI company is the one seeking the Promissory Note (which they sent with the email) before they will approve the short sale. Honestly, I’ve seen this happen before with MI companies seeking to try and get more out of the deal – but NOT when the difference between appraisal and fair market value (appraisal) is so SMALL!
What frustrates me more is that I just suggested that the buyer (because the seller is not able) wants to negotiate the MI note and assume the judgment on the note, that we’d try to pursue that angle. If what I understand from Elise’s email above is any indication, the bank is going to tell me the same thing IF the buyer would even be willing.
You’re right – it doesn’t make any sense to me. I’ve advised the seller and buyer of their options; including the seller telling them “fine; continue forclosure proceedings; I’ll just file bankruptcy”. Sounds like everybody would be better off. The property continues to fall apart because it’s sitting there vacant with Oklahoma storms taking it’s toll on the property. It would serve BOA right to get the property back. Let them try to sell the piece of junk! I’m not making anything off this anyway – was simply trying to help this poor seller.
I just feel bad that it has taken since October 2008 (It’s May 2009) to get to this point.
Insane.
TJ Voskuhl
McGraw Realtors
Tulsa, OK
918-557-1214
tjsells@cox.net
Our best bet is to have the seller agree up front that if the bank approves the sale but insists on a promissory note, they agree to accept it. If not, don’t bother with the listing. It will most likely end up in foreclosure and everyone wasted their time.