i am representing a buyer in a short sale where the 1st is held by BofA. BofA told these sellers to put together a short sale. After five weeks BofA approved our short sale but made the debt recourse in the short sale agreement when it was a non-recourse note to begin with. of course the seller's attorney told them not to sign the agreement. the negotiator told the seller's agent that if they don't agree to this the deal is dead. why would a seller agree to a short sale in this situation? we're in California a non-recourse state. they can just let the property be foreclosed upon and be better off. so now the property will go into foreclosure and cost the bank another 50K plus. my buyers offer came in at value. it's a very good offer. does anyone have any suggestions/ideas? any similar experience dealing with BofA. According to the seller's agent she just negotiated another short sale deal with BofA and their agreement included full settlement language. Nightmare!

Of course they will try to negotiate for the sale to pay a note for the difference. Some of it depends on if it's a non-insured loan or not.

No legal advice here but I would tell the bank to stuff it and that they can take an even bigger loss or close the short sale. The seller isn't getting any proceeds from the sale and they sure are not preserving any credit. Usually over 3 months of consecutive late payments will give you an M-9 rating on your credit which is the same as a foreclosure. Heck the sellers can stay there for months and months more and not pay a dime. FREE RENT -Do the happy dance!

Instead of telling the bank to "stuff it", you should tell the seller's agent to continue to negotiate with BofA to see if they can get it resolved.

I am hearing that BofA will approve the short sales, however they will charge off the loss as recoverable debt on every deal. I am not sure why sellers would sign this either. Unless the seller signs the approval with the conditions and then just avoids BofA altogether after the sale.

My guess is the agent who is handling the short sale is very inexperienced. There are lots of things that lenders will throw against the wall to see if they will stick. This certainly sounds like one of them. Could anyone blame them for trying?

But once they know they have a viable deal they will likely want to make the deal happen.

It may take no more then telling the loss mitigator once or twice that the seller won't do it, and quite likely the lender will back off of this.

Chris