Bank Owned Run-Around

[Capt j-rod]

Just bought another rental in my home town... It was a major headache, but it worked out. A Realestate agent listed it for sale for $40K for a 3br 1ba ranch. As-is conventional financing not available. I looked at it with my agent and made a full priced offer based on my numbers. The selling agent asked us to make an offer in writing and they would accept the highest bid after 1 2weeks on the market. I crunched all my numbers and made a solid offer. We were notified that we were "in the top offers" and we should sharpen our pencils and the highest number would be awarded in two more days. I said screw it I'm taking my cash and leaving, but my realtor convinced me to keep my original offer and let it ride. We got another call stating that there was still a higher offer but he needed a week to confirm the financials. I sent back that they had until high noon today or I walk. At 4:00 they accepted my offer.  I am very disgusted as to how this went, but at the end of the day I got a solid investment for what I wanted to pay. It makes me puke to realize that these scum bags try to get you to bid against yourself multiple times. I wanted to offer $1000 less every time, but it was too good of a house in too good of a neighborhood to let it go. I probably got lucky between the holidays and caught a soft market. Has anyone else had this happen? (yes there are good houses to be had around $50K that rent for $750 in my super low COL area!!!)

[Enigma]

This happened to me with Florida properties and DC properties.  It always seemed like they under listed the properties and then pushed me to give a better offer or my final offer.  I think I pissed them off when I kept to my original offers especially in Florida.  In DC... there was a couple places that I bid on that I offered more than what they were asking.  Looking back I am glad I didn't fall into the bidding trap.  I also felt like they were scum bags as well.

The last place I bid on in DC, they were asking $450k for a property that needed lots of work.  My final offer was $465 but they were not completely happy with that.  They wanted me to cover all their closing costs as well.  This is after weeks of going back and forth on the bartering.  I got feed up and walked away when they wanted me to cover all the seller's closing costs.

[Dicey]

Ours wasn't bank-owned, but it was a short sale. It was listed for $800k. There were 12 other offers. The bank only wanted to see the highest and best offer. Our agent was representing us and the seller. All parties (i.e. sellers and us) were known to her personally, so we knew the offers were legitimate. We also knew we were going to outbid any offers that came in, and we did. It is walking distance to DH's work, so worth the premium to us. Then the original loan was sold to Ocwen, and the cluster fuck began in earnest. The escrow dragged on for eight months. The market continued to rise in the interim, taking some of the sting out of what we had to bid to get it.

One Friday, late in the endless escrow, Ocwen demanded $35k more. On Monday we told them to fuck off and we hired our own appraiser to show that our bid, at $128k over asking, was fair. Several weeks later, it finally closed for our bid price. What a total pain in the ass. Fucking Ocwen.

A couple years later, we experienced some trickery on a rental we attempted to buy. Our offer was supposedly not high enough, but when the house closed, it was for less than our offer. We ended up buying something else. Immediately after closing, the broker dropped us like a hot potato. We suspect some sort of collusion, but how would one prove it?

[Capt j-rod]

The fuckery continues.... Our region has a realtors association that uses the same purchase agreements/form to streamline the sales process. Apparently these forms are not acceptable for the selling bank and we need to fill out their forms. Mind you my offer expired yesterday at noon, but I still accepted the deal at 4:00. They now gave us 48 hours to sign their agreement, but they haven't provided the magic forms. All of this shit for a $50k house that I am paying cash for. My realtor says he makes $500 for the deal and has to split it with the selling agent. Needless to say this is getting old for everyone. AAARGH! I guess the lesson to be learned here is never let others get in the way of business. I crunched my numbers, made an offer and stuck to my guns. Even if it falls apart and I don't get the house, the numbers are the numbers and that is how I make money. If you fall for their trickery you will spend more money thus making your business deals weak. It's just a house and its only a business decision.

[waltworks]

Um, real estate deals are often a pain in the neck and involve paperwork and inexplicable waiting for various people to get their shit together.

Is this your first investment purchase or something? Sounds basically normal to me.

-W

[Capt j-rod]

No Walt, not my first Rodeo, but the list it low and go through three rounds of raises is new to me. I don't live in California or DC, so usually when a property is listed it is bought at or usually below asking price. Especially for an AS-IS cash property. I have been rejected on a low offer but never an offer of asking price. There are many foreclosures that come through in my area.

[Duke03]

Ours wasn't bank-owned, but it was a short sale. It was listed for $800k. There were 12 other offers. The bank only wanted to see the highest and best offer. Our agent was representing us and the seller. All parties (i.e. sellers and us) were known to her personally, so we knew the offers were legitimate. We also knew we were going to outbid any offers that came in, and we did. It is walking distance to DH's work, so worth the premium to us. Then the original loan was sold to Ocwen, and the cluster fuck began in earnest. The escrow dragged on for eight months. The market continued to rise in the interim, taking some of the sting out of what we had to bid to get it.

One Friday, late in the endless escrow, Ocwen demanded $35k more. On Monday we told them to fuck off and we hired our own appraiser to show that our bid, at $128k over asking, was fair. Several weeks later, it finally closed for our bid price. What a total pain in the ass. Fucking Ocwen.

A couple years later, we experienced some trickery on a rental we attempted to buy. Our offer was supposedly not high enough, but when the house closed, it was for less than our offer. We ended up buying something else. Immediately after closing, the broker dropped us like a hot potato. We suspect some sort of collusion, but how would one prove it?

I'll second Ocwen is the lowest of the low.  God I hope they've been put out of business by now.  The very first house I ever bought my mortgage was sold to them.  Total nightmare.  They tried to add on their own property insurance 3 years in a row even though I had my own insurance and provided them with proof.  Never mind I had my escrow with them and they sent the payment to the insurance company every year.  That took forever to get my money back.  They are subprime lending scum that actually bought up a few good mortgages( I'm sure to cook the books) and that's how I ended up with them.  By the third year they pissed me off to the point I paid off my house just so I wouldn't have to deal with any bank.  That took 6 months with them giving me the run around as they couldn't give me a proper pay off ect.  Then I had to have an attorney threaten to sue them because they claimed when I paid my house off I gave up my right to my escrow account.

The only good thing that came of all that is they turned me off to any bank and forced me to find a great hard money lender for all my real estate purchases.  My last deal I got a 10 year hard money loan for 2.6% and $600 in closing cost.  Only needed to sign 3 pieces of paper.  So easy it was scary.  Hell I've had car deals that took longer signing all the paper work.

[Capt j-rod]

How do you find a hard money lender? We have a local bank that invests locally, but they are pretty steep on interest.

[Papa bear]

My brother bid on a bank owned auction 3 times before he got the house.  He was the highest bidder the final 2 times (first round he was #2 but buyer walked) and the reserve was met but the bank still backed out of the deal.  Difference between first and last bid were only a few thousand $$$. Should have gone with my bro the first time around.

I've got more stories but that was most recent. Banks are annoying.


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[Enigma]

How do you find a hard money lender? We have a local bank that invests locally, but they are pretty steep on interest.

In my experience if you need a hard money lender even a local bank that charges steep interest, they are for a quick cash loan.  After that you seek a mortgage company and work on getting the best interest rate for a REFI.  I have been lucky that a family friend that I have known for over 20 years will let me borrow any sum of money at 10%.  When I borrow the money it takes about 1.5-2 months to secure a loan from a mortgage company/bank.

Well worth it in my opinion.  First you are offering to pay cash, quick closing, and less headache for the seller.  Some sellers are willing to accept cash...  Cash is still king.

[Car Jack]

Games......

I think if they rejected my offer and told me another offer was on the table, I'd lower my offer by a random number.  If it were an offer of $50k, my next offer would be $49,829.52.  They screw around more.....$48,399.11.  They want me to fill their forms instead of mine....$48,115.87. 

[Capt j-rod]

Car Jack, it crossed my mind... But I was happy to get it for what I paid. They wouldn't accept my personal check for earnest money, so I got a cashier's check. Now that I submitted this today they want to see proof of funds available. Each one of these requests are followed up with "if not satisfied within 48 hours, then the deal is null and void". These people are a serious pain in my ass. It is a company called Service Link.

[Car Jack]

Man.....I hate games like that.

There's a very good chance that they have no other offers and are just being a pain in the ass for no reason.  Let the offer become null and void and get your deposit back.  Next, put in a new offer at $45k.  I'm serious.  If they want to be difficult, let it cost them money.  Give them an offer with 24 hours to accept and to close.  Of course I have no skin in the deal so all I want to do is make their lives difficult.

[Dicey]

Maybe they don't actually want to record the loss in 2017? They could be stalling until the end of the year. The 48 hrs. crap might be so it doesn't look like that's what they're doing. Just a guess.

[Another Reader]

During the downturn, I bought several properties in the Phoenix area.  Can't remember if it was a short sale or a foreclosure, but the lender in one case insisted on using Service Link Title Company in Southern California.  In Maricopa County (Phoenix), you have to record an Affidavit of Property Value when you record a sale.  When Service Link sent out the paperwork to sign, there was no Affidavit form.  I called, and their answer was that the form was only required in California.  I explained that the form they were referring to, the California Preliminary Change in Ownership Report, was a different document and the subject property was in Arizona.  The answer was they were not responsible for forms in Arizona and to send back the package as is, or they would cancel the escrow.  I sent the package back, and when the deed was recorded, I filed the Affidavit form a few days later.

Anytime you are dealing with a servicer on a foreclosure or short sale, you will have problems.  If the property is a good deal, grin and bear it.  Once the root canal is over, you will forget the pain

[redbirdfan]

I bought my current primary residence (future rental) as a foreclosure.  First it took forever for them to accept my offer.  Then I had to resubmit the offer on their form and sign off on a ton of addenda allowing them to waive everything.  It took forever for them to authorize me to de-Winterize the place and turn on the utilities to make sure everything worked.  Then it took about 4 months to get everything signed around and there were constant holding patterns to actually close on the property.  Dates in the PSA came and went.  There were no live people to call on the bank's side.  The listing agent was equally in the dark.  There were endless 1-800 numbers and transfers and voicemails.  It was a pain, but it was worth it in the end.  I got a place I love at a great price because everyone else walked.  Dealing with banks is annoying and frustrating but that's why you get the discount.  Hang in there.  It'll be worth it.   

[Capt j-rod]

We already cancelled out their forms that we had to use. Now I had to sign off on lead, asbestos, buried tanks blah blah blah. My personal check was refused and a cashiers check was needed for earnest money. Then it was proof of funds available, Now they wanted all the contracts re-signed with today's date. The only good news is that I can write off mileage for rentals. They want to close Jan 12. but I highly doubt that this can happen on their end. The saddest part is my realtor is a friend. The commission is about $750. It gets split between 2 agents and then his company will take $100. If he's lucky he'll get $200 for his trouble. It is no wonder these properties are the black sheep of Realestate. At least I don't have to pay heat, electric and taxes while they screw off.

[Hargrove]

In negotiating with used car salesmen and realtors, I usually counter any offer to bid against myself by showing a loss of confidence in the purchase and slightly lowering my bid or walking away.

"Oh, I don't know if they're willing to certify the used car for that price..."

"Oh! I didn't realize it wasn't in good enough condition to certify. I'd much rather look for another car that's in better condition, then."

Translation: if you want to sell this thing, you've heard what I'm willing to pay you already, and I'm about to ask for a better deal for having to put up with your deceptive nonsense.

The very best asset you could possibly have in any sales negotiation is wanting/needing the sale less than the salesperson.

[FiftyIsTheNewTwenty]

I'll second Ocwen is the lowest of the low.  God I hope they've been put out of business by now.  The very first house I ever bought my mortgage was sold to them.  Total nightmare.  They tried to add on their own property insurance 3 years in a row even though I had my own insurance and provided them with proof.  Never mind I had my escrow with them and they sent the payment to the insurance company every year.  That took forever to get my money back.  They are subprime lending scum that actually bought up a few good mortgages( I'm sure to cook the books) and that's how I ended up with them.  By the third year they pissed me off to the point I paid off my house just so I wouldn't have to deal with any bank.  That took 6 months with them giving me the run around as they couldn't give me a proper pay off ect.  Then I had to have an attorney threaten to sue them because they claimed when I paid my house off I gave up my right to my escrow account.

The only good thing that came of all that is they turned me off to any bank and forced me to find a great hard money lender for all my real estate purchases.  My last deal I got a 10 year hard money loan for 2.6% and $600 in closing cost.  Only needed to sign 3 pieces of paper.  So easy it was scary.  Hell I've had car deals that took longer signing all the paper work.

With the thousands of complaints against them that you can read on the internet, it amazes me too that they're not out of business.  However, they are teetering on the edge with several state attorneys general.  So I encourage anyone with even a marginal complaint to file it.  A lot of their "dirty pool" may be hard to pin on them, but please try. 

With us, they keep jacking up the escrow charges for property tax and flood insurance, gradually increasing our mortgage payment.  Every year or two I have to fight them to get back the excess and reduce the payment to what it should be.  They've even gone a year or two without paying the flood insurance or taxes, but keeping the money anyway.  This is the most common complaint against them, in the tens of thousands of cases, and they're still doing it.

Plenty of other stuff too, as noted above.

Back to the general topic, there's plenty of skullduggery in the bank REO world.  'Round these parts, foreclosures are often inside jobs, as are the auctions, which insiders hold back for their buddies.  Too many people show up for the auction?  Property mysteriously disappears from the lineup...