My understanding from this program is that the borrower needed to be in default by 1/31/12. This provision is to prevent BAC borrowers from now deciding to strategically default in order to qualify for the cash payout upon a successful SS. The borrower has to follow their SS agreement to the letter. This likely means, deliver the property VACANT and broom-swept CLEAN. Do NOT STRIP fixtures appurtenant to the property or that you specifically agreed to convey to the buyers. GO TO THE DUMP to rid the property of your debris/junk before buyer’s final walk-thru. Remove your pets, any progeny they had and all their waste from the property. Remove your non-running vehicles, boats/trailers and non-running appliances from the property and the street. Evict or otherwise remove your “tenants” and all their junk before buyer’s final walk-thru and replace anything they took off with. Do not do anything to jeopardize the timely closing of your SS (incl filing for BK). If you are divorcing, get your spouse’s timely signature on ALL DOCS when asked by your escrow officer to do so. In short, do NOT spring any last-minute surprises on the buyer.
The reason I stated the above is because this is what BAC required of its “Deed-in-Lieu Plus” participants in 2008/09, two of which I assisted. They even sent local RE brokers to check the condition of the property and pick up the keys (IF in satisfactory condition) BEFORE accepting the Deed-in-Lieu from the borrower and giving them their $3K “walking-money” check.
This all seems like a “no-brainer” to responsible Piggs but is NOT the norm for the majority of “short” sellers. Most of them “accept” the SS offer and then try to scam their way out, taking what they think they can get away with and leaving truckloads of debris in the house and lot for the buyer to work to clear out and pay to dump. Following the SS contract seems to be a tall order for a lot of short “sellers.”
Also, it is unspoken in BAC’s “program rules” but I believe these letters are only being sent to bubble-era purchasers whose I/O or Option ARM mortgages were recasted or persons who refied since their “bubble-era” purchase for lower payments only (no cash) and then came upon a hardship and had to default (unemployment, death of spouse, divorce, etc). I seriously doubt BAC is sending these letters to those who “cashed-out” or have any junior liens at all, unless THEY are the servicer/note-holder and it was also purchase money. (It was common for Countrywide to loan for an 80/20 purchase with an 80% 1st TD and a 20% 2nd TD during the “bubble era.”)
If any Pigg hears of borrowers with Countrywide PM seconds which were sold to investors getting these letters, I’d be interested to know this.
One last caveat is that BAC must be both the note holder AND servicer of the mortgage. Letters were NOT sent to those borrowers where BAC sold their note(s) to FF. Most of these letters were likely sent to qualified Countrywide subprime borrowers (“inherited” by BAC).
