Home Short Sale Flips Nixed in Florida

We have talked about the option contracts with short sales. It may be a bit tougher now for investors to flip short sales for big profits. Attorneys’ Title Insurance Fund notified its 6,000 member lawyers this week that it will not insure deals made with a popular – but controversial – method for closing flips of short sales.

In a letter to lawyers, the fund said it has become aware of short sale programs advertised on the Internet that promise to make investors lots of money with little or no work.

The letter says they involve investors entering option deals with homeowners for “the exclusive right to purchase their property for a period of time.” The investor negotiates a short sale with the mortgage holder by convincing it that the price it is offering is the market value of the property. The investor then finds a buyer for a much higher price. The sales happen simultaneously, and the investor pockets the difference. The problem is that “the original lender is not told that the buyer is flipping the property on the same day for thousands more than the lender has been told is the market value of the property.” The option contract method has been gaining steam as a way to work off inventory in a bad real estate market. Critics say mortgage holders are misled and don’t realize they could be selling for more.

If you or someone you know is looking at buying or selling distressed property…rely on the experts, The Distressed Property Experts of Team Baranowski! We will handle your short sale professionally and ethically.
Note: The information provided is for informational purposes. No legal advise is given or implied. Please check with a qualified attorney in your area

Bank of America formerly Countrywide short sale process streamlined?

Update: Bank of America Positive Changes to Their Short Sale Program

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.