Friday, October 2, 2009

Crazy Bank Story # 2

Re-blogged by 0 agents
Crazy Bank Story # 2 (edit/delete)
Yesterday I wrote an astonishing crazy bank story and a newspaper has asked me to write these stories frequently and they will bundle them and write a feature article.

Today's article is not so much about crazy banks but where a bank that acted slowly has caused extreme stress for a seller and a buyer. They have also lost money for two Realtors, a mortgage broker, a title company, and the new lending bank.

The property is in San Diego and the selling client contacted the bank to see if they would approve a short sale. Of course, the answer was to go thru the process. The Realtor listed the property and received an offer. 11 months later the bank-both first and second- approved the short sale. At the time they approved the short sale (11 months later) They demanded that the transaction close within 3 weeks. So, now the loan officer, appraiser, inspectors, etc; the whole gang is scrambling to get the deal done.

Buyer goes in and signs papers to close the deal. The next day the second mortgage division of the bank now announces that they want the seller to sign a note promising to repay the second mortgage. Deal dead. In California banks cannot go after a seller for a deficiency balance for purchase money loans. But in the case of a short sale this bank is demanding a signed note to recapture their loss. The seller will now let the bank go thru foreclosure and the second still ends up with no income. They could have made everyone aware of this 11 months ago and saved a lot of effort for many people. Seems the bank wants to sit and watch people scramble and all end up with nothing but frustration..Of course I will tell you. The bank was Chase.

Doug Jones