Seller asking for damage money while in Short Sale

Not sure of laws in other states, but in FL until the mortgage is paid off, the lender is entitled to change locks, order a BPO to see if value is there, check to make sure there are no hazards on the property and a myriad of other things that the buyer signs at closing which is on the note.

I agree that this is an unfortunate situation everyone is in, but you agreed to pay, and you didn't. It really doesn't matter what the reason is unless you are doing a short sale.

I think it's time for the seller to get it over with and stop quibbling over minor issues, it will only worsen his plight. Either that, or bring loan current.

Actually that is not quite correct. Florida, like every other state in the Union, only allows the locks to be changed under specific conditions. These are spelled out in the mortgage papers.

The buyer does have a legal right to "quibble" over an illegal lockout. And the banks know it. But an open line of communications with them will often resolve the issue.

We are in a sue happy society. But learn to pick your battles.

As for us as real estate agents, maybe we should be a little more careful on judgements on our fellow humans. You will find it will make you a more successful Realtor.

Oooppps. I'm making a judgement statement.

Maybe we should stop moralizing and address the issue at hand.

I'm coming into this conversation late ... wow a bit ruthless don't you think Linda for what you're saying???? I mean if it was a tenant landlord situation and tenant was not paying - you are STILL NOT ALLOWED TO TOUCH ANYTHING until you legally kick them out - G.forbid security is compromised and there are kids involved - might as well physically take their belongings and them and put them out on the street - can't do it no matter what... gotta do it legally or you risk getting sued -and as the Listing Agent I'd file a formal complaint on the bpo agent unless he switches the lock on his own dime - -he had no right to change locks without speaking with you first -

Like many on this forum, I refrain from passing on any "personal" judgments against a homeowner considering a short sale. I ask the necessary "prequalification" questions, look at all the documents, look for any assets (or no assets), and determine whether they qualify or not.

As many DID make poor choices, they don't speak for ALL. Having the home you still live in and maintaining well, then be broken into is not going to sit very well with most people, unless all the legalities have been satisfied by the lender. I don't think this is a case of "entitlement" mentality. This seller is really in a hardship situation (loss job) and is just trying to see if he can recooperate any out of pocket expenses that would not have been necessary if the lender was a little more careful.

And I think comparing a car being repoed verses a house being broken into for nonpayment is comparing apples to oranges. By the time a car is repoed, the bank usually has gone through all the hoops to "rightfully" make that judgment call. Just my opinion.

Ooooo ya'll are a little vicious up in here. Let me clarify a few points which appear to be misunderstood. First of all the main premise was based on a homeowner who stopped making payments. There was no reference of hardship or job loss. Secondly the question was regarding whether or not a complaint to the lender was beneficial since he/she was consdering a short sale. I never once said anything about 'throwing people out on the street'. What I said was I didn't understand the current entitilement mentality which appears to be nationwide when people cannot live up to their end of a legally binding contract. This is not a judgment on one person merely a statement about the current turn of events and has nothing to do about being a real estate agent or even a nice person this is regarding business transactions. In that regard a property is the same as a vehicle in that it is collateral for a debt. The agreement between a tennant and a landlord is not the same as a purchase contract with a mortgage attached. There is quite a bit being read into the scenerio here that was NOT presented and if it were a test question many would likely fail. The bottom line is DON"T give the seller any advice other than to seek legal counsel. Even as a listing agent (and there was no mention in the premise that the property was listed yet) it is the homeowners scenerio and not the agents as it isn't even under contract per the information provided.

I don't think the homeowner or mortgagor as I prefer to call them should go whining to the bank about a few hundred bucks for repairs. What one person says is well maintained is not necessarily another's.

Having done hundreds of BPO's I know the majority of houses that are occupied have obvious signs that there is someone living there. Many don't. Mistakes happen. I normally err on the side of saying it's occupied if it's hard to tell.

Maybe the agent that did the occupancy determination doesn't have the expertise needed to make the right call in this possible hard-to-tell case. Maybe not. Again, mistakes happen. But since there is such an overload in needed BPO work, how can people believe that there are a bunch of realtors that are experienced running around doing all this work? It will take more time to have adequate numbers of experienced agents available.

In any case, maybe people that are behind on their payments should be put on notice that they should make it blatantly obvious that the property is not abandoned so that it can be determined without question that they actually are occupying the property. If not, understand if you are behind on your payments, you'll run the risk of coming home to locks having been changed on your house.

Bottom line? Wah, wah, wah that they have to pay for some repairs. They are asking the mortgagees to suck it up for tens of thousands of dollars. I think a few hundred pale in comparison.

Also, how in tarnation do people expect the banks to take the loss, pay for adequate (or inadequate) staffing to process all these losses and then have to screw around paying out a couple hundred bucks for a stinking rekey?

Maybe mortgagors should be in regular communication with their lender to let them know that even though they're not keeping their part of the legally binding contract by paying for the priviledge of occupying the property (and probably not paying their water bill because they know it will be a lien on the taxes) they are, in fact, occupying and maintaining (yeah right) the property.

Or, maybe pay a few bucks a month to leave a light on and keep a blind open so it can be readily determined that the property is indeed occupied.

Everyone has valid points here. State Laws will dictate. I find that the biggest problem is National Mortgage Companies do not understand this. They have every right to do what State law allows, it is there responsibility to make sure they are acting within that realm. What if, someone had been at home and the intruder had been shot, would the bank have had to bear any responsibility? This is a situation that is out of hand.

RE Short Sale,

I noticed that there are some heated people in here so I decided that I would add my thoughts on it being that I don't think anyone really answered your question. Talk about tangents. I also don't think anyone has worked for a lender like myself either so here's some insider information.

You asked,"Could this harm the short sale process? Should the seller even consider writing to the legal department for reimbursement?"

Obviously no one here is giving out legal advice. The short sale review and taking the request for reimbursements to customer service or the legal department or property preservation (the department at the bank that handles these types of issues) are two totally different issues and they will both result in their own reviews. Two different departments doing two different things that don't coincide at the lender but possible outside when coming into real practice.

Now, if this goes to court, this will most likely place a lis pendens on the property as the term 'lis pendens' means "suit pending" or is like a notice to buyers to beware. If you make it to the place your short sale is being reviewed and it gets approved then at that point in time when you go to close the deal it could be a problem because the property is tied up in lawsuit.

To clarify why the lender(s) come in and secure the property it is because if the property is left vacant and someone hurts themselves on the premises not only can the homeowner be found liable but so can the lender. They winterize properties in the east and put fences around pools in California. Really it all varies based on where the property is located but they all serve the same purpose of protecting the home and their investment.

I used to get calls about this all the time. We would hear about damage being done through out the process of the properties being secured. I have heard of people's doors being ripped off, windows being broken, and coolant being spilled on the carpet.

The issue with the suit is this:

It is totally a he said she said situation. How can you prove when the damage was done? It could be turned around and blamed on homeowner just as much as they turn around and blame it on the bank. It could go on for a long time and at the end of the day it is all about cost and benefit. They could end up spending several thousand dollars only to take a chance on getting back some money for damages.

It's a terrible situation and there are of course dozens of factors that I am not aware off in order to make the proper and best decision for your clients. As we process hundreds of short sales you can believe we see it all.

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Jonathan Katz | Account Manager | Absolute Consultant Group

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Jonathan,

Again, thank you for your input! Your comments always help out a ton!! And thank you for your lender updates on your website!