I know this site is for REO Professionals, but thought I might find some help with a Short Sale.
Mortgage Insurance Negotiations
Thought I would bring this to everyones attention. I have a Short Sale with BofA, 100% financed purchase money loan from 2007. Since it's 100% financed there is Mortgage Insurance on the loan. We have had this home listed for over 380 days, have had 4 Bank Approvals (All coming 80+ days after the offer is written, thus the buyer walks) and as of recently the bank is telling us and the seller, he must agree to pay the Mortgage Insurance Company $10,000. Now this $10,000 can come in the form of cash, or promissory note, but can not come from the proceeds of the sale.
BofA would not give us the MI companies contact information for over 9 months, they stated neither the seller nor I had the right to contact the MI company. After several hours on the phone with the LM at BofA we finally got the MI information.
The MI company would not return my calls so I had the seller contact them. After 10 days of calling and leaving voice mails for the representative at the MI company, the seller negotiated a deal.
Upon receipt of this news both the seller and I contacted BofA in hopes of keeping the buyer and finally getting this short sale done. Now, even though we had an approval on the price and we're simply waiting for the MI company to sign off, BofA has closed our file and is requiring us to begin the process all over. According to BofA, this is due to the 10 days it took for the MI company to negotiate with the seller.
Frustrating is the nicest word I can think of. I feel like this is robbery. Doesn't the MI company insure the loan in the event of Foreclosure or Short Sale? Why is this like an act of Congress when we already have an approved price? It's almost as if BofA would rather Foreclose than work out a deal.
Please correct me if I'm wrong, but having the MI company require money from the seller is like crashing your car and your car insurance requiring you to come up with large amounts of money to replace it. What is Insurance for if we have to pay anyway?
Thanks in advance for your time and input!
“Covering All Angles”