Part 2 – Equator Tips for Success

If you want to be successful in short sales that require Equator make sure to employ these Tips and Traps. Part 1 can be read here

The following Equator tips and traps come from Dan Welch.  Dan Welch is the lead short sale negotiator for Home Solution Counselors and a bring ‘em on and “your next” closer.

Bank # next

Dan saw the light and fled from the darkside (he used to work inside the bank – working against homeowners).   He now spends the better part of 40 hours a week with a wireless headset, three phone lines and a Batphone Hotline into The Gore Law Firm as he routinely hammers banks into accepting and approving short sales.

We asked Dan to provide us with a game plan for success with Equator.  Most agents know that Bank of America‘s short sale tool can cause a real estate agent to lose control of the short sale process.

1. Know your time frames:  The servicer and the agent both have time frames on ALL tasks assigned in Equator. Call every week, ask the servicer what the next task due for the negotiator is and ask when that task expires. If it’s beyond that deadline, bust some balls.  Don’t let up.  They promised they would meet a deadline!
2. Read the manual: When you initiate a short sale with BAC, they send you a user’s manual for Equator. Read it! Knowledge is power and power is good.
3. Stay on top of your tasks: When a task is due on 11/14, you better make sure to add a note to your calendar. When that task dies, so does your deal.  How long have you been working on this file? 6 weeks, 3 months, a year? And it was declined and closed by those haters at the bank and now you have to start over!!?? YOU (agents, or 3rd party negotiators) are responsible for completing the assigned tasks by their deadline. Helpful hint: Get your borrower’s paperwork and required docs together BEFORE they’re requested and keep updated bank statements and paystubs. Being prepared; I know it’s a novel concept.
4. It ain’t over till it’s funded! : Just because you get a counter acceptance, doesn’t necessarily mean you’re getting it approved.  Did you forget about mortgage insurance?  Don’t understand how MI works.  Read this article HERE.   This stuff can cause an extra delay of 2 weeks or MORE – after the initial SP acceptance.  So, wait to tell your seller that the deal will work until AFTER you find out what the MI company wants.  To be safe, wait until you have a demand payoff letter, in hand, from the servicer – and the numbers actually work.
   
5. Keep impeccable notes, take screenshots & record ALL calls: When your negotiator who’s working too many files drops the ball on yours; you need proof and evidence to show their supervisor or one of the upstanding gents at “TGLF”.   Nothing better than replaying their own words from a recorded call or displaying a screenshot.  If necessary bring a lawsuit with this evidence.  They’ll turn tail and run and you’ll get what you want.

Final thought: Equator and the industry in general are changing at a break-neck pace. These tips may be pertinent today and mean little tomorrow. It’s an ever-evolving business and it’s important to stay on top of the facts and evolve with the industry.  Most of us, who are still in this crazy industry and plan on eating tonight, have had to adapt greatly over the past several years.  Equator is new, but it’s not scary – just frustrating.  Good luck and try to keep a cool head.

Part 1 – Equator Traps to Avoid.

If you want to be successful in short sales that require Equator make sure to employ these Tips and Traps.

The following Equator tips and traps come from Dan Welch.  Dan Welch is the lead short sale negotiator for Home Solution Counselors.  Dan saw the light and fled from the darkside (he used to work inside the bank – working against homeowners).   He now spends the better part of 40 hours a week with a wireless headset, three phone lines and a Batphone Hotline into The Gore Law Firm as he routinely hammers banks into accepting and approving short sales.

Since the Houston area’s Houston Association of Realtors’ MLS reports that over 73% of all listed short sales never close, with most being lost to Texas’s rapid foreclosure process, we wanted to know why Dan is getting 93% of all short sales approved and closed.

We asked Dan to provide us with a game plan for success with Equator.  Most agents know that Bank of America‘s short sale tool can cause a real estate agent to lose control of the short sale process.

Here are Dan’s Traps to Avoid.  Monday I’ll post Dan’s Tips.

1. NEVER trust their counter(s): If you receive a counter in Equator, take a screenshot before you do anything else. When you accept or counter back the “counter worksheet” usually disappears for good.   BAC is known for countering the offer with “A” and then reneging on it and countering again with “B”.    SECRET TIP : A = typically a value close to the current offer which represents ACTUAL property value.    B = the price your buyer won’t pay, even in a good economy.    My view is if they don’t honor counter “A”, even if they knock a couple grand off their minimum net to make good on it, you’re closer to getting them what they need to get the deal approved by management or investor.
2. NEVER agree to a prom note or cash contribution: I stopped agreeing to prom notes and cash contributions when I was asked by BAC to “please have your seller sign a promissory note to cover some of (GENERIC INVESTOR)’s losses.” – NO!     The borrower isn’t responsible for an investor’s risky investment decision gone sour. They can either agree to a short sale or lose money on the deal in foreclosure.   This should be your attitude.
   
3. Email everything through Equator: You’ll almost NEVER get a call from the servicer after making a request through Equator. Most of these agents are overworked. Sometimes carrying a workload of up to 375 files. It’s all they can do to keep up.  Equator’s email messaging system is great for tracking a deal and the conversation.  Also, no more hearing “I never got the message”, because you, your client, the bank’s negotiator and their supervisor can see the proof in black and white in the Equator message archive.
4. Dispute their value: The bank won’t disclose this…. but, sometimes they skew the BPO or appraisal results to meet their own needs!!   So, call them out on it. If you’re a competent agent, you should have completed a CMA or at least run comps to make a good assumption as to property value. If the bank gives you a ridiculous number, tell them how ridiculous it is and submit comps, CMA, repair estimate or WHATEVER you have to devalue the property. I think since so much of the new process differs from the traditional short sale process, that agents or negotiators tend to forget they have the right to dispute the bank’s alleged property value. It doesn’t always work, but it’s better than rolling over and taking it! Remember, if enough of you “roll over and take it”, the bank and their investors make new policies or guidelines to make it harder for you and the rest of us to stand up and fight. So, for the sake of us all, FIGHT!
5. Don’t give in.  Sue them if needed:  Many times the negotiator on the other side is powerless or plain incompetent.  If things go south or your file is facing foreclosure you CANNOT trust that simply because the file is in review in Equator or you have accepted an offer in Equator that they won’t foreclose. Get an attorney that you can trust.  Get an attorney that has successfully filed lawsuits and WON against Bank of America.  You can look this up yourself in the Federal or District Court level in your area.  See if they have open AND closed lawsuits against Bank of America or whatever bank you are fighting.   Lawsuits will allow you to remove Equator’s power and will cause the bank to assign special staff to handle the lawsuit. If necessary get a TRO or restraining order against the bank for negligence. (This is where that screenshot you took might come in handy).

The Wall Street Journal is reporting that BofA is ready to crank up the foreclosure machine once again.

Amazing what can be done when Bank of America might take a financial hit.

BofA can’t seem to locate the submitted paperwork for a loan modification (or short sale) at least 30% of the the time.  Their vaunted Equator system can take weeks to deliver a written approval for a short sale once “approved”; but yet they now can process and replace over 100,000 affidavits and assignments of mortgages in just two weeks!!

Wow, they must have hired some new robo-signers we haven’t met yet.

Why?  Because it takes time to read through your own affidavit, much less an entire Application for Foreclosure.

The average “application for foreclosure” in Texas is 40+ pages.  They must have somehow found a ton of people with live, actual, personal knowledge of the proof of ownership and the exact amount owed on each of these 102,000 loans they are “fixing”.

Now here is the scary thing…follow me here:

At only 15 seconds a page, it would take at least 10 minutes to read each application.  Remember the person is swearing they know everything is accurate and PERFECT.

10 minutes x 102,000 loans = 1,020,000 minutes.  Assuming they have 100 people working on this, that now equates to 10,200 minutes per person or 170 hours.  At 40 hours a week that would take over a month if they worked non-stop.

So how can they be ready in two weeks?  Maybe they found 1,000 people with “knowledge” and thus it can be done more quickly.

When they finish this task maybe they can put these industrious workers on loan modification and short sale reviews.

- The Bank Slayer

Plain and simple – it is dangerous to practice law without actual knowledge of what you’re doing.   Not so much dangerous from the standpoint of ”unlicensed practice of law”  but instead that a typical homeowner is not prepared to go into court and face a hostile (and possibly knowledgeable) attorney working for the bank plus deal the uncertainty of getting a judge who may or may not have the patience typically needed to deal with a “Pro Se” party.

If you are facing a lawsuit in regards to your home or want to file a lawsuit against your mortgage company, please seek out a credible and experienced attorney that has experience in real estate and/or mortgage law.  A good tip is to go to the District Court Clerk in your county (or go online) and look for suits in which mortgage companies are being sued.  See which attorneys (or law firms) are representing homeowners in your area.  You don’t want to be the practice case for a lawyer unversed in the subject matter.

Thanks to Jeff Barnes for writing the piece below.

–  The Bank Slayer

DON’T TRY THIS AT HOME III: MORE HORROR STORIES OF PRO SE FORECLOSURE DEFENSE DISASTERS

Some years ago, there was a tv commercial where a couple had a leaky kitchen sink. The husband, obviously not a plumber, told his wife “Don’t worry honey, I can handle this; it’s simple”. Needless to say, after many hours and a flooded kitchen floor with the pipes shooting water like a fountain, they called a plumber who remedied the problem in minutes, but only after having to spend quite a bit of time remediating the damage done by the husband.

In the last 2 days, we have received more than 8 horror stories from pro se borrowers who have tried to defend their own foreclosure cases, both in judicial and non-judicial states. Despite all of their efforts using concepts either gained from internet surfing or talking to other non-lawyers, the bottom line was the same:

“Help! My case is screwed up!”

“The Judge dismissed my lawsuit!”

“The Judge will not compel the original note!”

“The other side is trying to get attorneys fees against me!”

“My home has been sold even through I sued!”

We have repeatedly cautioned non-lawyers from trying to engage in the practice of law especially in this ever-evolving field of law where many states do not even have case law on the problems with MERS assignments, the necessity for proof of chain of title in order to foreclose, the elements of legal standing, etc., and where many of the Judges, through no fault of their own, have just not been presented with these issues yet. Although many of the legal concepts in proper foreclosure defense have been around for decades, they have not been applied to the complicated securitization sceanarios attendant to the generation of millions of mortgage loans from 2001 through 2007.

Two other problems which invariably result from “do-it-yourselfers” are, first, that once they get backed into a corner by the Judge or the opposing attorney and then try to retain an attorney, the attorney’s job has been rendered more difficult because the attorney has to first attempt to undo the damage caused by the pro se’s mistakes before even getting a chance to try to advance legitimate issues and defenses. As such, the attorney has to spend more time on the case than he or she would have if they had been given the case from the getgo, which means higher retainers and more fees. The second problem is that the pro se has probably angered the Judge and the opposing attorney to the point where the new attorney is facing a lion’s den going in. We have had to cope with this situation many, many times over the last couple of years.

For those who insist on proceeding by themselves, there are several “theories” which have been uniformly rejected although they continue to be bandied around the internet, to wit:

(a)  “Claims in Admiralty”. Admiralty jurisdiction is exclusive Federal jurisdiction for claims which occur on “navigable waters”, which is a legal term essentially meaning that the waterway is one on which a boat can be piloted using maritime navigational maps. Thus, unless you live on a houseboat on a active waterway which has been mapped and platted, “Admiralty” does not apply.

(b)  “Presentment bonds”. These have been universally rejected. A bond is collateralized by either full cash or other tangible property (e.g. gems, real estate, etc.) so that if a claim is made on the bond, the collateral satisfies the payment. “Presentment bonds” do not quality.

(c)  “The bank did not lend me money”. This is practically frivilous. Whatever the “bank” did, it permitted the borrower to either pay off the existing mortgage (on a refi), allowed the borrower to obtain cash out (on a HELOC or cash-out refi); or obtain a home (on a purchase-money first mortgage). Attempting to advance this theory to defend a foreclosure is like walking through a dynamite factory smoking a cigarette: you are going to cause everyone to explode, including the Judge and opposing counsel.

Yes, litigation is expensive. Yes, attorneys are not cheap. However, someone who tried to play attorney and then gets hammered is going to either (a) lose their house, or (b) wind up paying an attorney double or triple to TRY to fix the damage caused by the do-it-yourselfer, assuming it can even be fixed and assuming the Judge is not already thinking negatively about the case because of the nonsense advanced by the pro se who has, in the Judge’s opinion (and rightfully so), wasted the court’s time.

Jeff Barnes, Esq.