Bank of America formerly Countrywide short sale process streamlined?
June 12, 2009 by Craig Baranowski
Filed under From My Blog, Local Real Estate News
Countrywide was one of the largest home loan providers in the United States, as a result they have been overwhelmed with a staggering number of foreclosures and short sales. During the last twelve months they have received a large amount of bad press and has earned a bad reputation for taking an excessively long time to process a short sale. In some cases Countrywide has taken as long as 8 to 9 months to approve a short sale. In the process the seller get discouraged, buyers walk from the transaction and Realtors lose faith in a system that seems fundamentally broken. Bank of America’s purchase of Countrywide appears to have only exacerbated the problem.
In recent months we have seen and heard of talks about a streamlined short sale process and incentives being put in place by the Obama Administration under the Making Home Affordable Program. This program is targeting to prevent homeowners from foreclosure with alternative options including mortgage modifications, short sales and deed of lieu of foreclosures. You can read more about the program here.
We have yet to experience any tangible changes to Bank of America’s short sale process however, this letter to one of our customers is a sign that they are acknowledging and trying to define a standardized short sale process. In this letter Bank of America is expecting the short sale process to take 30-40 days to complete. If the loan was sold to an investor it will take an additional 20 days to process. This would make the entire process from start to finish 60 days. Our experience with dozens of Bank of America – Countrywide short sales has been anywhere from 3 months to 6 months.
If we could get close to a 30-40 day turn around on short sales with Bank of America it would be almost magical and welcome any changes to improve the process. Click here to view the letter from Bank of America.
Steve, wouldn't changing the title charges change the bottom line (purchase price) on the Final HUD? Is that acceptable to lenders?
And, thank you for answering my earlier quesiton!!!!!!
Unfortunately, that idea got shot down by my attorney….he said any adjustments to title charges at this point would not give us back anything, it would only increase what the lender is getting. But, thanks anyways
Hi,Craig just found out that the second lien is asking for $5,000 but boa is only given 3k so its taking this long over 2k but we dont know the exact amount for the 2nd lien holder!.Also I heard this morning from our lender that they extented the tax credit!!!I hope they did just in case we don't close by the 30th!!!
THANKS !!!!
Hi Jennifer
OK. There is a $2K short fall on the second mortgage lien release.
I typically try to get this addressed up front, but unfortunately that is not your situation.
There are a few options:
1. Seller brings $2K at closing to pay off second
2. Buyer pays the $2K at closing. The issue here is that FHA will not allow you to pay as a closing cost. You may be able to increase the purchase price to cover the $2K as long as you do not exceed the FHA appraisal amount…and you need to get creative with the HUD and BofA to make it work as it will show them paying $5K towards the second when they only approved $3K.
3. Push back on second and try to get them to agree to the $3K. Use FHA as the leverage.
Craig B
Craig I wrote a comment but I guess it never got put in right so here it is again…the 2nd morgage can't be to much because they want 5k from BoA but they are only given up 3k,so thats what is going on now so we still haven't heard anything and the sellers agent already said we wont close by our 7/5 date so we continue to what…also we don't mind it now because the tax credit got pushed until 9/30/10!
Hi Jen, I glad they are trying to extended the tax credit, remember the bill was only approved by the senate, it still has to go through the house. Though I think they would be crazy not to pass it also. To many people dealing with bank owned or short sales, that will miss out if they don't. Good luck. I hope you get your house, and the tax credit. Craig S. We closed on the 9th, and have been repairing and painting on ours. Hang in there everybody, there is a finish line.
Hi All,
Does any one know when the US house of representatives will vote on the proposal to extend the tax credit closure date ?
I have been searching the web with no answer
Thanks
Hi everybody, don't be distracted by the tax credit, its only 10% of the purchase price, if you think that its $8,000 or $6,500 you can only get that if you are buying a house of $800,000. Craig S.
I'm sorry if you are buying a $80,000 dollar house or more.
Hi Craig,
My name is Lauren and I am also one of the many trying to purchase a short sale with BofA. We wrote our offer and it got accepted by the seller on April 1st. Three weeks ago they asked for the sellers hardship letter. It is now the end of June and we haven't heard a thing…. Is this just part of the process or are the sellers and their agent not telling us something? It seems to me like other people that put their offer in around the same time as we did are recieving counters or at least hearing back. My agent has emailed and their agent has said he hasn't heard anything yet. What should I do at this point? Thanks so much! -Lauren
Hi Craig,
I have an offer on a short sale home in CA. There was another offer that was lower than ours that was accepted by the sellers just hours before the listing agent received our cash offer and financial stmt. Doesnt the bank want to see all offers? We had our agent submitt an addendum that we are in first back up position, over 30 days ago to the listing agent. We have not gotten a response back from the sellers or listing agent and have been told the agent is out of town. Our buyers agent doesnt want to rock the boat. But dont all offers have to be presented to the sellers in Calif?? What can we do at this point to let the bank know we are wanting to purchase the home and will pay more money for the home? thank you for your advice.
forgot to tell you the loan is with Bank of America. and we have no idea what the loan amount is.
Hi Marie -
Bank of America only has the capability to handle one offer at a time. In Florida all offers must be submitted to the seller. The seller then will pick the highest and best offer to submit to the lender for short sale approval. Unless the seller immediately signed the first offer, you should have had time to get your offer to them for review. It takes a few days to put a short sale package together and submit to Bank of America, so there is a very slim chance that the offer was submitted to Bank of America within hours of getting the offer.
Craig B.
Hi Lauren,
I really do not know how to answer this one. When a short sale is submitted to Bank of America they must get a full and complete short sale package. If they are just getting the hardship letter in June after two months…then this tells me that Bank of America does not have the entire package and the short sale package is in Never Never Land. Unless they have ALL of the documents and a completed package they will typically not process or review the file.
Finally if it has been 60 days the financial statements and bank statements from the seller are already aged and will need to be submitted again. Check with the agent and specifically ask, “When was the full and complete short sale package submitted to Bank of America and do they have all of the required documentation?”
Craig B.
We closed on our short sale a few days back!!! From purchase agreement to closing took 79 days (about 2.5 months). HAPPY!!
I've got quite a few questions that have gone unanswered for quite awhile now in regards to a hom we are purchasing that has a B of A mortgage. We put in our offer March 26th. It tool quite awhile for our Realtor to get back to us to tell us that both sellers had signed off on the home. We then waited and waited to hear from the bank. About 2 weeks ago we contacted our Realtor and she informed us that after a 3 hour phone conversation with B of A she found out that the bank had also signed off on the home. However, our Realtor stated there are some addendums (sp.) that need to be filed by B of A before we will get a fully executed purchase agreement. We are ready for this entire process to be over. It is going on 4 months now and no one has been able to give us a closing date. Are we any further along in the process than we were to begin with, or are we just beating a dead horse? Should we drop the purchase agreement and move on to another home? How much longer will getting the purchase agreement bank from B of A take? The home we are trying to purchase is in Indianapolis, IN and is listed as a short sale, Any opinions or advice on our situation is well appreciated.
Hello Craig
I owe 200K on home put on market 3/2009 169K dropped the price every month final got a offer 8/2009 75K short sale BOA rejected the offer 12/2009 advise to come with higher offer, they wouldn't counter the buyer or say anything further. Started to pursue the deed-leiu in Feb/2009 and was told my house was listed at $75k and that was to too higher because my appraisal only came in at 35K and that I must have the property listed at $35K for 90 days to qualify and if I get a short sale offer I can submit it. I received a letter from them stating I'm to list for $35K. Well I received multiple offers with the highest at 55K submitted the shortsale with the letter advising me to list at 35K, they verbally set a closing but a month later went back and said I need a higher offer and if I didn't come with one in 3 days they will cancel my shortsale. They advised they would accept $75K the original offer, I'm very frustrated and don't know what to do. I don't want the property to be foreclosed on but this is draining.
What can I do?
Nicole -
You are actually doing really well on the short sale. If you had on offer on the 26th of March it usually takes some time to put together a short sale package. Try to find out what the additional addendums are. Bank of America usually sends closing docs to the seller and Realtor that have the terms of the closing detailed out. Beyond that and a few arms length agreements there is not much else to do.
Craig.
Danille -
This is very frustrating. Is this a Bank of America short sale and is this being submitted in the Equator system? If so, they sometimes have an old appraisal or BPO in the system that needs to be refreshed. I would call Bank of America and try to get someone on the phone and work through the issue. It appears there seems to be a serious miss-communication.
Craig.
I am trying to get through a HAFA shortsale on my home here and i am sitting at the underwriting and approval spot here for over 30days…… I am getting so frustrated everytime i call in they point the finger at one another.. between Hafa department and Boa shortsale department.. seems no one is getting it done.. we have all our docs in and had 2 appraisals we have had our offer here for months and our buyer still on board for now but I dont want to loose her or have to re update everything and make this take even longer…. has anyone finished a hafa shortsale with Bank of america and how did you get it going through the underwriting and approval… any advice please please i could use it
Hey Craig…..
I was actually wondering how long will a second appraisal take coming from Bank of America? And why is it required if the initial appraisal was approved and signed off on?
We have been in the process of buying a short sale from BOA since March and are about to walk away. The seller has a first and second mortgage both with BOA totaling $457k and our offer is at $281k. The seller has hired a third party negotiator and we are working through them. The 3rd party negotiator asked us to get our own appraisal done (out of pocket) to show BOA that they appraisal from over 90 days ago at $350k was outdated and no longer correct. Our appriasal came in at $278k and was submitted by the negotiator to BOA. BOA then requested their own appraisal or BPO to be done and it was completed last week. BOA has had it in their hands for a few days now but supposively will not share with our 3rd party negotiator what it is. The sellers agent as well as our agent have all but washed their hands of the deal and are really not helping us at all anymore. Our offer of $281k had an expiration date of today and we are working with our realtor to try to get it pushed out one more week. But being 8 months pregnant we really cannot wait anymore. I am guessing FHA has something to do with one or both of the mortgages as we had to have an FHA appraiser do the appraisal. We feel like we are really being ignored and jerked around but are so in love with the home at this point and cannot find anything else even remotely comparable for the price. The negotiator says BOA has the newest appraisal and it is in the process of being reviewed. We are just at a loss at this point. Help!!
I am a seller who has a contract for 170k. I have two loans and both are with b of a. One is for 252k and the other is for 32k. We submitted everything to b of a on 6/7. The original offer was 160k but b of a countered a couple of times and we got it to 170k. They supposively accepted the 170k and asked us to submit a HUD statement that matched the numbers they requested.
My question is, are things looking good? How long does it usually take for the bank to review the HUD and hopefully accept? Can they say they now want 171k? If they told my agent to make the HUD look a certain way number wise, can they still tell us that i need to come up with money at closing? Or would they have said that before we prepared the HUD?
Hi Craig,
I owe more on my HELOC than I do on my first mortgage. I have an offer (short sale)which would pay off all of the first and a small portion of the HELOC. While waiting for the short sale to go through, B of A has since charged off the HELOC, but said it was still collectible. Now, this makes the offer more than I owe on my first mortgage. The real estate agent is still calling this a short sale, but now I'm responsible for the full HELOC debt and the first mortgage will be paid in full while the overage pays for the sales commissions and legal fees from my agent. How did I benefit from this? I thought that the short sale was when the bank agreed to take less than what you owed (1st and HELOC combined)?
I am the selling agent and the listing agent has been very slow with any Equator updates. I just saw her work flow sheet and I'm not listed as the selling agent, she put her name in both so I haven't received any updates-is this legal?
Susan -
This is a tricky situation. Oftentimes Bank of America will handle the HELOC/2nd mortgage in the short sale if they service both mortgages. Is this your primary residence? Are you still living in the residence? If the answer is yes. You should be pursuing a short sale under the new HAFA program.
If this is not your primary home then I would suggest calling Bank of America and working through what they are proposing. Typically you can negotiate down the owed debt on the HELOC after the short sale has been completed. However, I highly suggest to consult a local real estate attorney and your accountant to see what are some good options for you.
A short sale generally will have much less impact on your credit and you can negotiate down the debt after the short sale if and when they pursue the deficiency. With a foreclosure your deficiency is typically greater and your ability to negotiate down the debt is much more difficult.
Craig B.
Devin -
This is a great question. Do you know if your offer is the only offer they are working or if you are a back up offer? Bank of America only works one short sale at a time in the Equator System. I am not sure why she is entering the info this way. It will cross the legal/ ethical line if you are cut out of your commission…but this will be seen on the HUD and should have you listed there. I would ask the agent why she did this. Normally all of the information must be correct as they create the approval letter based upon the info entered into the Equator system.
Craig B.
Graig,
We are in the final stages of negotiating with BOA. The house is set to go into a trustee sale on Oct 15th. If they do not accept or counter our latest offer and they end up owning the home at the auction, how soon can I deal directly with BOA instead of the listing agent? She is very unprofessional and unethical. We would almost like to go directly to BOA as soon as they take ownership of the property and before it is re-listed. Is this possible?
Thank you
We recently got a counter offer back from B of A at a price we are happy with, however we are slightly confused because the counter offer is signed as POA by the third party negotiator who represents the sellers and we were expecting it to be signed by BOA. The counter offer also says that upon us signing it does not mean that we are in mutual acceptance, that it still has to be approved by the MI company. Is this typical in a BOA short sale? Thanks!