Sovereign Bank Has Kept My Home In Short Sale Limbo For Almost Two Years

As anyone who watches enough house-hunting shows on HGTV is aware, the short sale process can sometimes drag on for several months as the bank that holds the mortgage drags its feet on approving the sale and reviewing paperwork. But one reader tells Consumerist her home has been under contract for a short sale since November 2010 because Sovereign Bank takes so long to process the paperwork that by the time it finishes, it needs to start all over again with more up-to-date documents.

Lauren tells Consumerist that the short sale came about after she spent a year trying unsuccessfully to renegotiate her mortgage with Sovereign.

“It was a year of lost paperwork, lost files, and no return calls,” she writes, adding that even though she responded to every one of Sovereign’s document requests within 24 hours, the bank “eventually declined our request for a re-negotiation citing lack of paperwork from us.”

And so they moved on to the short sale, and not long after the property went into contract in 2010, Lauren moved out in anticipation of closing the deal.

She writes:

Early on in the short sale process, we had gotten as far as the bank ordering a BPO [Broker’s Price Opinion]. They declined the offer, then the buyer made a counter offer. They seemed to think this was going to be acceptable, but by that time, the paperwork had expired. The paperwork expires every 3 months, but it takes them longer than 3 months to review the paperwork — every time it gets up for review, its expired!

Since then, Lauren claims she has been around this paperwork terror-go-round six separate times.

“Our paperwork is about to expire again,” she tells Consumerist. “At which point we need updated BPOs, an update HUD closing statement, updated bank statements, and we need to re-send all the other docs again.”

Lauren says Sovereign told her it’s the bank’s policy to not save paperwork once it has expired, so even those items that haven’t changed since the last time still need to be re-faxed.

And it looks like one recent rule change intended to streamline the process has only steered her into a dead end.

See, mortgage servicers are now required to provide a dedicated contact person to homeowners like Lauren, so that they don’t have to constantly re-explain their situation to someone new.

However, Lauren says that in the last three months alone, she has actually had to deal with four separate “single point of contact” people at Sovereign.

Yet, in spite of this revolving door at Sovereign, the bank has thus far refused to let Lauren speak to someone at a supervisory level, citing the “single point of contact” rule.

“We do not see any end,” she tells Consumerist. “Our real estate agent says he completes short sales all the time in 30 days, 60 at most.”

We’ve written to Sovereign to see if anyone at the bank is willing to at least review Lauren’s situation to see if there is anything that can be done to free her and her house from short sale limbo. If we hear anything back, we’ll be sure to update.

We’ve also suggested the Lauren file a complaint via the Consumer Financial Protection Bureau’s mortgage portal.


Edit Your Comment

  1. Marlin says:

    Move back in rent free or rent it out.

    I’m seeing the glass as half full here if they want to drag it out.

  2. Peggee has pearls and will clutch them when cashiers ask "YOU GOT A WIC CHECK MA'AM?" says:

    Yet, in spite of this revolving door at Sovereign, the bank has thus far refused to let Lauren speak to someone at a supervisory level, citing the “single point of contact” rule.

    That is one heck of a creative interpretation of that rule. Somehow I don’t think that’s what the framers had in mind.

  3. Loias supports harsher punishments against corporations says:

    4 “single point of contact” people sounds like Soverign is violating the law.

    • NeverLetMeDown2 says:

      Unless the previous people are either no longer with the firm, or doing something different within the firm.

      The law appears to be intended to prevent a “you need to deal with Bob for form A, Jenny for form B, Sarah for form C, etc.” situation.

  4. sorta savvy consumer says:

    This sounds like one of those times when a lawsuit is in order. They are clearly in violation of the 1 contact rule and are clearly dragging their feet.

    File suit declaring the whole mortgage in default for the bank. You should be granted the deed immediately. Bet the bank gets off it’s ass pretty quick.

  5. crispyduck13 says:

    I don’t understand these banks doing shit like this. It’s almost as thought they want the homes to fall into foreclosure so they can recoupe even less money.

  6. PunditGuy says:

    I don’t understand how banks can pretend to be bad at moving data around and evaluating data. That’s all they do.

    A shoe factory that takes orders but can’t actually produce a pair of shoes doesn’t get to stay in business for very long. This should not be tolerated by regulators because it’s either fundamentally dishonest or a sign of crushing incompetence.

  7. lvdave says:

    Geez.. This is what I’d expect from BofA…ALL these f’ing banks are circling the drain.. And you wanna bet we (the taxpayers) are gonna bail em out again??

  8. scoosdad says:

    Start at the Federal Reserve consumer help website and download this pdf:

    How to File a Complaint Against a Bank (Federal Reserve pdf)

    Says this on the first page:

    If you have a problem with a bank or other financial institution, contact the Federal Reserve. We can help.

    We can help you by:

    • Identifying the appropriate federal banking regulator and referring your complaint to that agency.

    • Investigating your complaint if it concerns a bank supervised by the Federal Reserve.

    • Answering your questions about banking practices.

    • Explaining your rights under federal consumer protection laws.

    (contact info given in the pdf)

  9. gellfex says:

    The basic bank problem is no one wants to be the one that books the loss. If you keep kicking the can down the road, no one has to say “we lost $XXX,XXX on this loan”.

  10. jasonq says:

    I sell real estate. I recently closed the sale of a house that had Bank Of America as the lender. It took two offers (one which fell apart) and 13 months start-to-finish. The file was assigned to SIX different people at BoA over that time, half of whom I never was able to get hold of or get a response from.

    I strongly suspect that for the most part – especially on federally-insured mortgages – banks are more than anything playing a game of rope-a-dope with homeowners.

  11. bellabell says:

    bofa is doing somewhat of the same and it is a mess. you can’t get to the proper departments, can’t return calls, can’t verify info…. bofa rep today tried to tell me that she cold not help me or transfer me… let me get this right… you are telling me that bofa, one of the largest financial companies in this country has only one person out of thousands and you are it…. she transferred me. we really should not have to go through this… they are making money hand over fist at our expense and yet congress thinks we are the bad guys here…. hum….

  12. Peggee has pearls and will clutch them when cashiers ask "YOU GOT A WIC CHECK MA'AM?" says:

    I was trying to figure out why this only had 16 comments, and then it hit me. No one can come up with a way they would have totally handled this better than the stupid OP or defend poor maligned Sovereign. If you can’t say something nasty and self-important…don’t say nothin’ at all, I guess?

  13. rdm says:

    I was in “short sale limbo” with Chase for 2 years, but never got to an accepted offer. They were so incompetent that every single offer expired before they bothered to respond. Thanks again, Chase.

  14. ancientone567 says:

    Sovereign Bank has a lot of shifty and almost criminal policies. I am not surprised. Do you know they charge you 5- to cash a check from their own bank if you do not have an account with them? lol that did it for me. I NEVER do business with these crooks. NEVER!!

    • January says:

      Yep. Sovereign Bank is owned by Santander Banc. They also provide car loans under Santander Consumer USA. Santander was voted worst bank in the U.K. And now their practices are being noticed in the USA. There are several class action lawsuits against them and many, many state Attorney Generals are looking at them.

      Google Santander Consumer USA complaints. It’s sickening.