Consumer complaint received 2018-09-05
Product: Mortgage — Conventional home mortgage
Issue: Struggling to pay mortgage — 
Company: RUSHMORE LOAN MANAGEMENT SERVICES LLC (SC)

To whom it may concern : XXXX XXXX XXXX ( hereinafter referred to as the Debtor ) filed a petition for Chapter XXXX Bankruptcy on XX/XX/2018. XXXX XXXX ( herein after referred to as the Trustee ) was duly appointed as the Chapter XXXX Trustee. The Debtor requested the Trustee short sell the Debtors property located at XXXX XXXX XXXX XXXX, XXXX XXXX SC ( hereinafter referred to as the Property ) as it is in the best interest of the Debtor for the following reasons : 1. A short sale is generally less detrimental on a Debtors credit score than a foreclosure. Further, a lingering foreclosure could have a lasting negative impact on the Debtors ability to restore her credit. Usually, it takes several months for the bank to start foreclosure proceedings once the Debtor stops making payments. If a Debtor files for Bankruptcy sometime before the foreclosure sale, the foreclosure process is extended even longer as a result of the bank having to get relief from the Bankruptcy Stay. In that situation, the Debtor will be discharged from her debts and starts re-building her credit again, but then several months later, when foreclosure it complete, and her credit is damaged once again.

2. It saves the property from deterioration and becoming a blight to the neighborhood and lowering the values of the surrounding properties ; 3. Non-dischargeable post-petition HOA fees are paid ; and 4. A short sale pays the mortgage companies more than they would receive in a foreclosure sale, especially a second mortgage company which would generally not receive anything through a foreclosure sale. The mortgage company will also save fees and costs by avoiding the foreclosure sale, including the cost of the auction, having to hire a realtor, or find a buyer who is ready, willing and able to buy the property.

The Trustee is legally the owner of the property pursuant to the Bankruptcy Code. The Chapter 7 Trustee is authorized pursuant to 11 U.S.C. 363 ( f ) to sell property of the bankruptcy estate. According to 11 U.S.C. 541 ( a ) ( 1 ), property of the estate includes all legal or equitable interests of the debtor in property as of the commencement of the case. The Trustee currently has a short sale contract on the property. XXXX & XXXX, XXXX ( hereinafter referred to as the XXXX ) is negotiating the short sale with the bank. We believe that short-selling property within the framework of a Bankruptcy case is beneficial for all parties involved. 

My understanding is that banks are required to help homeowners avoid foreclosure if possible and, if a bank is not giving reasonable allowances to avoid a foreclosure, a complaint to the Consumer Financial Protection Bureau may be necessary. I believe the following facts in this case warrant an investigation by the CFPB : 1. Weeks submitted the short sale contract to the lender on or about XX/XX/2018. 2. The lender declined the short sale on or about XX/XX/2018with no explanation. 3. Weeks contacted the bank on or about XX/XX/2018 and a representative named XXXX XXXX informed XXXX that the banks valuation was over $ XXXX and the short sale offer was too low. At this point, the bank had not contacted anyone from the Trustees team to schedule an inspection of the property, but the banks representative informed Weeks that the bank had a valuation of {$1.00} XXXX. After further questioning, Weeks was able to determine that the bank had only performed a drive-by/ external valuation. 
4. On or about XX/XX/2018, XXXX submitted a value dispute. The value dispute from the Trustees team included realtor price opinion based on interior inspections, comparables ( including distressed and non-distressed properties ), repair estimates, showing feedback reports, offer summary for property ( we received multiple offers on the property all within 10 % of the list price ) and other supporting documents/ information that supported the contract price. 
5. On or about XX/XX/2018, the value dispute was declined and a representative from the bank said that the {$1.00} mill valuation was confirmed with an interior inspection.

6. On or about XX/XX/2018, XXXX challenged the valuation because the bank had not contacted anyone from the Trustees team to schedule an interior inspection of the property. The bank again certified the valuation was based on an interior valuation. 
7. On or about XX/XX/2018, XXXX requested a copy of the interior valuation. 
8. Following Weeks request for a copy of the interior valuation, the bank contacted the Trustees team for the first tie for an internal BPO ( herein referred to as BPO agent 1 ). Again, this was the banks first request for an interior valuation although they had been indicating to the Trustees team that the valuations they were using were interior valuations. 
9. Shortly after BPO agent 1 was ordered, without explanation or disclosure, the Trustees team received a request from the bank for a second BPO ( herein referred to as BPO agent 2 ).

10. Around this time, the Trustees agent spoke with BPO agent 1. BPO agent 1 said that he submitted the BPO report on or about XX/XX/18. He said, when he submitted the first BPO, the bank challenged his comps and the bank gave him other comps that they wanted him to use in the valuation. BPO agent 1 did make a few updates per the banks direction, but the value did not change more than a few thousand dollars with their suggested comps. He said they asked him to increase the value, but he told them he could not justify their requested adjustment. 
11. The bank only provided to the Trustee the results of the second BPO from BPO agent 2, which was higher than the BPO from BPO Agent Number 1. As an aside, BPO Agent Number 1, XXXX XXXX, has had 20 Homes Sales in last 3 years. He is also the Broker-in-Charge ; as opposed to BPO Agent Number 2, XXXX XXXX has only had 3 Homes Sales in last 3 years. 
12. On or about XX/XX/18, XXXX submitted a complaint to the bank and asked to speak to a manager. Weeks spoke to XXXX XXXX who mentioned that the investor may have plans to take the property back as an REO and have their own contractors perform the repairs needed. The investors thoughts on taking back the property and doing minor repairs will likely not work in the Town of XXXX. XXXX is the toughest municipality to deal with in the area and they are not going grant an occupancy for the property without repairs. The town has already flagged the property in their system for unrepaired storm damage from the last hurricane. As soon as a contractor shows up to do work, the Town of XXXX is going to request access for a full property inspection. They will likely require an engineering report and full permitting on the repairs. 
13. During this time, the bank filed a Motion for Relief from the Bankruptcy stay. While most banks will willingly allow the Trustee more time to close on a property before they proceed with stay relief, this bank would not allow the Trustee more time and directed its attorney to proceed with stay relief so it could proceed with foreclosure. 
14. On or about XX/XX/18, the buyer paid for an appraisal of the property. The appraiser valued the property as-is at {$560000.00} which was less than the contract purchase price. The property was {$910000.00} for after-repaired value.

15. Weeks submitted the appraisal to the lender who replied : Investor disagrees with the assessment and has denied the offer. 

It appears the investor is pushing for a foreclosure in this case. The property is basically in tear down condition. Our team has provided sufficient information to support the contract value ; we received multiple offers on the property and presented the investor with the highest and best offer ; and we have a cash buyer who is ready, willing and able to close as soon as we are able. Not only do we believe the bank will get a higher sales price through a short sale due to the issues with the condition, but there are judgment ( s ), an unsatisfied lien and substantial taxes/ liens owed to the DOR and IRS , so it would be faster, less expensive and less complicated for the bank to allow the Trustee to sell. Despite all of this, the investor has still refused the short sale and wishes to proceed with foreclosure. 

It appears the bank is not affording the consumer reasonable allowances to try to short sale the property and mitigate his losses. It also appears that the bank is trying to intentionally over-value this property in particular, which could lead to over-inflation of the surrounding market in general and lead to damaging, lasting effects on the market/ economy as a whole. 

We appreciate your further investigation into this matter, and look forward to hearing from you as soon as possible. If you should have any further questions, please do not hesitate to contact me. 

With kindest personal regards, I am Very truly, /s/ XXXX XXXX Chapter XXXX Trustee