Mr. Cooper REO/Xome with Tenants who can buy)

[JD Ball]

Ok, so I have a unique situation here. We are long term tenants since 2016 in a 8-9BR 6000 sq ft house in a landmark district. We have lease through mid 2024. House was apparently in foreclosure proceedings for over 10 year. 2016 judgment in court but owner got a stay because of our tenancy and her promise to pay. Well, years go by, then covid and ultimately, goes on the public auction block with ridiculous reserve. Bank buys back on credit last summer. We have investors swarming but reveal nothing. We don't get notice until Oct. One thinks - why didn't the owner just do a short sale - well, her property manager was delusional and kept thinking she could sell the house for $2.3-3m. Yeah right, the house has two decades of deferred maintenance and 85 original windows, a 30 year old roof and we had 200lbs of leaves removed from gutters. Anyway, come January we get a 90 day notice. The house was passed on to a REMIC (Wilmington Trust NA). Provided our lease and all other docs to the eviction attorney, but we asked to negotiate with bank directly and buy the place. From August to March, they had the house up on Xome with over 9 failed auctions. We put in an offer in February with POF and attorney took over 3 weeks to reply with just "Rejected." We then said, well, what exactly doe the bank need? He took another two weeks to reply, 1) Sales contract drawn up by RE Attorney/broker, As-Is, 3-day close, funds in account 60 days plus. Ok, so we got the RE Attorney, put all together and submitted. And we actually submitted above the judgment amount. Though the house needs $1-1.5 in eventual reno, this could be done over time. So then we hear back from the attorney, "Oh, I was busy prepping for a case and hadn't seen that the bank accepted an offer and is under contract. Well, we checked xome and the final bid on the most recent auction that ended over a month ago was $1.5 or about $35k less than our offer. And here we are now 14 days after we were told about this (so what happened to the 3-day close?).

Anyone have experience with Mr. Cooper or Xome in REO? Anyone imagine why the bank would not want to sell to us the long term tenants as opposed to selling a liability of a fully-occupied house with lease to an investor-flipper in NY? Could it be the Mr Cooper Group internal gravy train to their Xome subsidiary so they get the broker fee? I even called Mr Cooper and talked to REO folks who wondered but they had no direct person to contact about this unique situation. Yet when I called Xome, they said that someone at Mr Cooper reviews and accepts/counters/declines offers. Shouldn't the REMIC and bank be seeking best possible offer? The reserve as we learned was $1.8, maybe it dropped into $1.75 right before the auction most recent. So it is possible the bank counter offered on the Xome $1.5 winning bid but, add in broker fee 5% and closing costs and fees and a full house ready to litigate for 1-2 years, plus the house condition/reno costs for a flip........doesn't seem like a wise risk for an investor as opposed to us, long termers who plan to stay for decades. Most buy houses from estates around here but definitely vacant. We are investors but for the long term!! We actually had our own appraisal done for our initial offer and the report noted a $300k encumbrance deduction off the total due to our tenancy/lease so we cannot see what any investor flipper might be thinking.

Advice?