buyer credits on HUD

A Bank of America Short Sale Counter Offer

short sale counter offerBefore I talk about a Bank of America short sale counter offer, let’s address this Lady Gaga thing. I mention it only because if I received an engraved invitation, I would decline to attend an event to watch Lady Gaga in a bottle strip to her undies and get a tattoo. I would not go even if I was invited through a last-minute text message. Surely, there are better things to do, no? Like, take out the garbage before your house starts to stink or get a pedicure. But this Lady Gaga thing was a huge black-tie event attended by celebrities as a debut perfume launch. It hurts my eyes to even read about it.

But maybe that’s why I am a Sacramento short sale agent and not running around with the likes of Jason Wu, Paris Hilton or Lindsay Lohan. I have many more exciting things to do like talk to third-party vendors at Bank of America about counter offers. What is a Bank of America counter offer? Well, for starters, it is not exactly a counter offer, which confuses a lot of Sacramento sellers. I try not to use jargon when talking with my clients, but sometimes it slips out, and for that I am truly sorry. I am not sorry that I didn’t go to the Lady Gaga event.

A short sale counter offer is issued by Bank of America or a third-party vendor representing Bank of America through Equator. It is a formal response to all of the fees noted on the HUD and submitted to Equator by this Sacramento short sale agent. See, if the bank can reduce some of the fees, that will increase the bottom-line net to the bank. Plus, investor guidelines state acceptable and non-acceptable fees. Some of the fees often contested are miscellaneous title services such as doc prep, courier, notary and some don’t want to authorize payment for recording of the deed. Sometimes they reduce the escrow fee.

In Sacramento, it is customary for the seller to pay the escrow fee. But in other parts of the country and California, the escrow fee is often split 50 / 50 between seller and buyer. It is not unusual for the bank to place a maximum cap on the amount it will authorize. In many instances, that amount is $750.

There are also negotiators at the bank who do not read the net sheets we send them. They instead read the HUD, and the HUD is very confusing to many people. Ever since the RESPA change a few years ago, we’ve been fighting battles with bank negotiators who insist that credits to the buyer are not allowed — when the credits shown on the HUD are not really a credit to the buyer at all. Sound confusing? Imagine how the bank negotiators feel.

Yesterday I spotted a city transfer tax fee of almost $600 that the negotiator had removed from the HUD. When fees are removed, it means the buyer has to pay them. Because of SB 458, the seller cannot pay fees the bank refuses to authorize. So, I questioned the negotiator. I asked her why it was removed because it was a standard and customary fee paid by the seller in Sacramento. This fee is based on .275% of 1% of the sales price. It can amount to a lot of money, in this case: six hundred bucks.

Turns out the negotiator thought it was a buyer credit on the HUD. After I explained that there were no credits at all on the HUD, the negotiator put that number back into the list of authorized fees and approved it. I wonder if she would like a bottle of Lady Gaga’s new perfume?

Photo: used with permission bigstockphoto

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