US Bank: A Bad Short Sale and Foreclosure Bank
Some mortgage companies, lenders, mortgage loan servicers and banks are just terrible to deal with when trying to stop a foreclosure or get a short sale approved. This is one of them.
Case Study #1
On 1/22/2010 I submitted a short sale offer package to Terry Hairston (see below) of US Bank via email at regarding a property in Springfield TN. US Bank was the 1st mortgage holder and was owed a total of approximately $253,000. There was also a 2nd mortgage from another lender. The short sale offer of $240,000 would have netted US Bank a total of $206,045, which represents a recovery of over 81% of the amount owed. This is pretty good by short sale and loss mitigation standards. The buyer was obligated to wait 45 days before they could terminate the contract. I contacted US Bank several times in the weeks after the short sale offer was submitted, but after over 3 weeks I still did not hear from the loss mitigation person to even confirm that the offer was received. Finally, on 2/17/2010 (nearly 4 weeks after the offer was submitted) I received a phone call from Mr. Hairston stating that US Bank wanted to net a minimum of $253,000. This net to US Bank translated into a price of $290,000, or about $50K more than what was offered. It also just happened to be the listed price of the property. Given that the property had a lot of cosmetic issues, many bad windows and a foundation problem, the offer I submitted was actually an excellent offer for US Bank. I repeatedly communicated this to US Bank and warned them that if this buyer walked away the next buyer would likely pay much less. Despite this, Mr. Hairston and US Bank demanded a full payoff of $253,000. Eventually, the buyer, having been informed of US Bank’s absurd responses, terminated the contract on 3/6/2010. The buyer’s Realtor did say, however, that the buyer was still interested and to keep him informed. Finally, after following up several times I was able to get Mr. Hairston to submit the property for a re-valuation in order to get US Bank to see that the price offered was in fact very good. On 3/11/2010 I received an email from Mr. Hairston stating “I will contact as soon as our value has been completed. Thanks”. I initially took this to be a positive. However, less than a week later my seller clients received a notice of foreclosure sale with the sale scheduled for 4/9/2010. After several follow up emails and calls to Mr. Hairston to try to get the foreclosure stopped and to find out the result of the re-valuation I gave up on hearing from Mr. Hairston and contacted the loss mitigation manager, Mark (can’t remember his last name). On 4/2/2010, Mark called me back and immediately gave me a nasty attitude saying “this is a bank owned asset and we can do whatever we want” and “we know the value of this property” and “so I guess the owners are not going to make a payment?”. Given that one of the owners was on the phone, I took the last comment as an unnecessary insult to my sellers – after all the fact that the sellers could not pay was the reason we were here. This loss mitigation manager, Mark, was such a monumental jerk and his absurd comments were so unnecessary that I let him have it. I told him that I was fully aware of what was going on here – that is US Bank was purposely overvaluing the property so that they could “cook their books” by showing their non-performing loan asset, which was secured by the property, as being worth the full amount US Bank was owed (i.e. $253,000). I also told Mark that I know that US Bank, like a lot of banks, is purposely not approving short sales in the hope that the infinitely foolish Federal government would come in and buy up the non-performing loan assets for more than the underlying properties are worth so by falsely overvaluing the properties the banks could hope to get more from the Federal government. I told Mark that these practices are are major obstacles to successfully concluding short sales, and, thus they are negatively affecting financially distressed homeowners and taxpayers. After I said these things, Mark said “you know everything, don’t you?” and some other sarcastic comments, and as a result, the “conversation” degraded into shouts and threats. Ultimately, Mark the jerk threatened to hang up on me, which he eventually did since I would not accept his nonsense. After the call the seller could not believe what a total moron Mark was and how I gave him a well deserved verbal whipping. After all the absurd and unnecessary nonsense that Mark said it seemed like this was a dead deal. However, a few business days later on 4/8/2010 I received a short sale approval letter for the exact amount that my offer netted ($206,045) and they postponed the foreclosure sale until 6/4/2010. That’s right, US Bank did not change a thing. After all the name calling and insults, I was proven right. US Bank, Mark and Mr. Hairston are liars who had their bluff called. Unfortunately, the buyer was notified of the approval, but decided that they were no longer interested in the property after all. Also, the short sale approval letter allowed US Bank to pursue the sellers for a deficiency. When I inquired to get this wording removed, I never heard back. I dropped the list price in the MLS and advertised the property as an “approved short sale” at $235,000. After several weeks I dropped the price to $219,999, but there was still no interest. On 5/21/2010 I contacted US Bank to inform them that there was no interest in the property and that the net to US Bank would have to be less than $206,045 to which US Bank responded by stating that $206,045 was their bottom line and that if a short sale offer produced a lower net it would be rejected. The property was foreclosed on less than 2 weeks later. US Bank sold the property at the foreclosure/trustee sale on 6/4/2010 to a 3rd party investor for $131,501. However, that foreclosure was done incorrectly (the foreclosing attorney advertised the wrong mortgage information) so the foreclosure sale was rescinded and redone a few weeks later. At that sale, the property was sold for $175,000. That’s right, US Bank accepted a sale price that was over $31,000 less than the short sale would have netted them. What a bunch of geniuses! US Bank shareholders should fire the management immediately.
Here is the full contact information for the Loss Mitigation Contact at US Bank
Short Sale Specialist
Default Assessment Group
205 W. 4th St, Suite 500
Cincinnati, OH 45202
Office: 866-637-5763 ext. 6358