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Short Sales beware of new twists and turns from lenders!

Short Sales beware of new twists and turns from lenders!

I first read a bit of very important information from Bryant Tutas warning of instances where home owners in the short sale process had their bank accounts seized by their lender. One would have to have an account with the lender in order to have this happen, but happening it is, in more than one state. The recommended solution for this is if you have bank accounts with a bank that also holds your mortgage, pull your money out and transfer it elsewhere. This practice may be illegal in some states, I do not have confirmation at this point in time if it is illegal in Connecticut. However agents who live in states where it should be illegal have clients who say it happened. Checking with an attorney is the suggested way to find out if it could happen in the state you live in.

Bank of America has been named in the above practice.

As if this wasn't bad enough, CNBC has a report that second lein holders have begun to demand money paid outside of closing to them from the buyer and or from the real estate agent in order to release the lien. We all know this practice is illegal, however it is being done according to real estate agents interviewed. Check out this video from CNBC, it is an eye opener. BOA, Chase and Citimortgage have been reported as participating in this practice. Thank you to Mark Archer who alerted me to this, Mark is a bull dog who is not afraid to tell it like it is!


According to the report only 7% of all HAMP applicants have been approved for loan remodification. Another scary figure, 2.8 million properties received foreclosure notices in 2009, that is up 120% from 2007. The figures are staggering, and rising for the month of December 2009.

Andrea Swiedler, Realtor, Southern Litchfield County Real Estate

2017 President, Greater New Milford Board of Realtors

2017 Connecticut Magazine 5 Star Realtor

 

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Coldwell Banker Residential Brokerage

Litchfield County Regional Office,375 Danbury Rd, New Milford, CT 06776

 

© Andrea Swiedler 2009 - 2017

 Always do right. This will gratify some people and astonish the rest. - Mark Twain

Comment balloon 13 commentsAndrea Swiedler • January 15 2010 07:16PM

Comments

Good information, I will have to check and see if they are doing this in Minnesota and inform our clients if this possibility exists.

Posted by Craig Campeau (Coldwell Banker Burnet) about 10 years ago

Andrea--I just read Bryant's post and had not heard of the practice. As for the other, I had seen something about that and was puzzled as to why banks would ask people in terrible financial trouble already to do something they know is illegal so they can recoup funds. Scary.

Posted by Teri Eckholm, REALTOR Serving Mpls/St Paul North & East Metro (Boardman Realty) about 10 years ago

Andrea it does not surprise me that Bank of America would be involved in this.  It seems these days Bank of America is not being very service mind, and putting their customers in very sticky situations that go beyond the mortgage end of their business.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) about 10 years ago

Craig, and to that point, over in the Short Sale Superstar group there are agents from states where it should not have happened who say it is happening to their clients. The suggestion is to have them pull accounts from lenders who hold the note.

Teri, amazing isn't it? And scary. I watched the clip a few times to my own horror. And Bryants warning is just amazing. Now we have to tell them to hide their money under the mattress? Stupid stupid stuff if you ask me.

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) about 10 years ago

George, to ask the BUYER or real estate agent to POC or else they won't sign off on the note? Or to seize money from people? I don't know, I am thinking coffee can in the back yard is the only way to go. BOA is on my list, and if they were all that was available I would be using the coffee can shotgun method of saving my money. Never.... never would I use them. Shame on them, shame shame shame.

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) about 10 years ago

I had some clients who had a loan mod with Chase that went wrong.  After the mod, Chase said they made a mistake and the people owed them more money, and the payment needed to be higher, and levied their account without authorization.  For NINE MONTHS they tried to get it straightened out to no avail.  Chase claimed they were late and in default even though they were auto drafting the payments each moth.  Eventually, in extreme emotional distress, they listed the home they built and loved, as a short sale and moved out.  It's NUTS!

Posted by Janna Scharf, Coeur d'Alene Idaho Real Estate Expert (Keller Williams Realty Coeur d'Alene) about 10 years ago

Andrea...

Our very own Jeremy Blanton was a key figure in the breaking story about second lien holders! This BofA stuff gets more incredulous every day.

Posted by Richard Weisser, Richard Weisser Retired Real Estate Professional (Richard Weisser Realty) about 10 years ago

Hi Andrea - The fraud out there in the loan mod business is rampant.  I have almost the exact same story that Janna mentioned with someone here in Sandpoint.  The foreclosure scenario for 2010 will only exacerbate the situation.

Posted by Kent Anderson, from Schweitzer to the Lake (Coldwell Banker Realty-Schweitzer Mountain, Sandpoint, Idaho) about 10 years ago

What the banks are doing to people is INSANE!! 

Posted by Carla Muss-Jacobs, RETIRED (RETIRED / State License is Inactive) about 10 years ago

Janna, so let me understand, Chase didn't give them the load modification, levied their account taking MORE money? I am mystified, and scared to death. Wow.... I think you should call or email CNBC with the story.

Richard, how on earth did I miss that. I am amazed at all these stories.

Kent, I am just blown away by the total incompetence by the banks. Well, it is either ruthlessness or incompetence. Maybe both?

Carla, it is insane, and it seems to just get worse every day.

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) about 10 years ago

Wow.  Hard to believe that this could happen today.  Maybe we all need to just dig a hole in the backyard for our future "deposits",

Posted by Tom Boos, Providing the very best of service to Sellers and (Sine & Monaghan Realtors, Real Living) about 10 years ago

It seems that we just keep getting more and more bad news for people who are already in trouble.

Posted by JL Boney, III, Columbia, SC Real Estate (Coldwell Banker) about 10 years ago

Andrea .... It's called the Right of Offset. The concept is that if you owe the bank money on a deliquent loan and they owe you money in the form of money you've deposited with them, they have the right to offset your liability with their liability. Last I knew it is legal in CT. It's been around for years. If you have any kind of loan through a CT bank, especially if you got a discount for having a deposit account with the bank. check the lloandocuments and I'll bet you find a paragraph that talks about the bank's right of offset. Rick

Posted by Rick Cignoli, Sr. Mortgage Loan Officer (Norcom Mortgage NMLS# 71655 Equal Housing Lender) about 10 years ago

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