BOA And Promissary Note
Hey Everyone--
I posted the following under the Bank of America short sale post:
BOA and I are at an agreement for a short sale except for 1 importanct aspect-----they want a promissary note signed by the sellers. There is no way the seller can afford it on top of a divorce after 1st of year and having to find a place to rent.
I countered with no promissary note which I know is slim to none but anyone have some ideas for me. I've never had a lender ask for a promissary note although I knew it happens.
Any suggestions? I'm to get their decision today and ouwld like some last minute ammo! Thanks
Jim
Hey Jim,
Based on the sellers financail status, that in and of itself would be my ammo for BOA. I know that BOA would like to bleed the dollars out of the seller over the next couple of years, but ask them to review the short sale package, the sellers tax returns, current bank statements, etc. Tell them that the only probably way this transaction will happen is if they will short it and waive and deficiency. Based on the sellers financial info, that is the only approach that I know of. There is still hope for this one though!
BAMZ
BOA is the classic "steeley eyed" banker. The primary ingrediants of the short sale package was the sellers financial inability to repay the loan. You did the right thing. However, BOA may insist on the note.
The choice would be to give them what they want or let the property get a little closer to the sale date. The sellers may want to completely wipeout their debts off via a Ch7 BK which would also wash the BOA promissory note.
Bamz and Sammy--
Thanks a bunch for the info. My contact at BOA is very understanding and said she will do her best to get their "decision-makers" to relieve the promissary note. However, my contact is now out of the office until the 5th and the new contact says, "We here sad stories all the time. If the seller chooses not to pay the promissary note that is on her."
Well, I think I'm going to wait until the 5th to follow-up with my primary contact. I'll keep you posted.
Thanks again
Jim,
If the property goes to teh sherrif sale, BOA may come after your seller for a deficiency judgement anyway, whether or not they decide to sign the PN. You may run this past the seller.
If the seller is considering signing the promissory note and then filing bankruptcy to releive themselves from the debt, this could be bad for you. The bankruptcy trustee could overturn your sale, and that could be a BIG mess. Make sure your seller doesnt include BK in the near future.
The other bluff that you can use with BOA is to simply tell them that if the are going to require the PN, that there is no deal because it is simply impossible for the seller to do. Tell BOA that "unfortunately" you will have to walk away and BOA will have to take the house back at auction. If they tell you to go aheadf and put your walking shoes on, then let them sit for a day or two and then YOU call them back with your new final decision.
Best of Success!
BAMZ
Bamz--
Good advice. With my primary contact at BOA I told her that I wasn't going to set the seller up for failure by having a PN because the seller's husband is leaving her after this whole thing is resolved and she doesn't even know it.
Regarding the bankrupcy, what if the seller filed for bankrupcy after we have closed the short sale? I'm not going to recommend this to her but curious. Wouldn't a bankrupcy look better than a mortgage foreclosure?
Jim
Jim,
IF the seller were to file BK shortly after your completed SS, this still could be overturned. If I knew this in advance, I wouldnt move forward with the transaction because it is such a fine line. I'm not exactly certain on when the timeline after the sale for BK is no longer a factor, you may call up a local BK attorney and ask their input on this.
Although they are both rough spots to have on a credit report, I would much rather have a BK than a Foreclosure on my report. But prep your sellers, make sure you know what they are planning to do, so that you can protect yourself as well!
Best of Success!
BAMZ
Bamz--
I agree with you. I'm going to try and calm my nerves and just wait for next Monday. Something else, a lot of other investors have been calling her and I have no idea what their offers/ideas have been.
Think I'll wait until I get BOA's decision on Monday and then lay out all the options for her to make her own mind up.
Have a Happy New Year!!!!!!! Jim
Jim,
That is a good thought to wait until Monday to see what BOA is going to do. If indeed they will work with you, be sure to ask your seller if they have signed any papers with any other investors. You just want to make sure that they seller hasnt signed over a deed to any other investor.
Have a Great Holiday!
BAMZ
Bamz--
I will.
Happy new year to you--jim
BAMZ,
Let's say that BofA accepts no deficency judgement on the seller and grants the short sale. IF the seller files bk right after the investor's purchase, is the investor still at risk with getting the purchase over turned?? How does the bk attorney see this situation when the lender waives all rights to debt collection. Hopefully he /she doesn't see "any potential" equity to their creditors.
Thanks,
Bginvestor
Bginvestor,
Whether the bank waives the deficiency judgement or not probably isnt the issue. If the seller is planning on filing BK in the near future and you know about it, the risk is still there of the sale being un-done! It is not up to the bank, it is up to the Baknruptcy Trustee!
BAMZ
Nice work BAMZ.
I like the part about the final offer, followed by the new final offer.
I call my final offers "final offer for now"
of course, I don't tell them that
[addsig]