Bank of America Short Sales
Bank of America has introduced a new automated system called Equator that it is currently usingÂ to processÂ all of itâ€™s short sales ofÂ conventional loans (that is all of itâ€™s non-FHA and VAÂ loans) as well as former Countrywide loans which it acquired when it purchased the company. Equator has expedited Bank of Americaâ€™s short sale processÂ by having the borrower, and their real estate agent upload the short sale package, that is theÂ application documentation, directly to the Equator System.Â
Bank of America Short Sale Process - Getting Started
The first step to initiating aÂ Bank of America / CountrywideÂ Short Sale is to list the home with a Realtor who specializes in short sales and has significant experience with this lender.Â Your agent will be critical to the success of your transaction and while many agents have begunÂ marketing themselvesÂ as short sale specialist, few of these individuals possess theÂ knowledgeÂ and experience required to warrant this title and it is imperative that you select a true short sale specialist to represent you in the sale of your home.
The listing of a short sale is initially quite similiar to the listing of a traditional sale, however, the your lender will require the following additional documentation; the previous two yearsâ€™ tax returns will be neededÂ (these should also includeÂ W-2s as well as tax schedules), paystubs forÂ the previous 2 months,Â your previous 2 monthsâ€™ bank statements for all accounts,Â borrower financialÂ form (a detailed list of all of your income,Â expenses, loans and bills),Â a hardship letter (why you are no longer able to afford the mortgage), andÂ aÂ third party authorization (gives your lender permission to speak with your agent about your account).
Why are these documents needed?
Just as the you were required to apply and submit documents to obtain the loan, the bank is now going to require that you apply and submit proof that you can no longer longer afford the loan. The bank requires these documentsÂ and uses them to help better understand the borrowers financial situation and toÂ determine ifÂ the borrower should be granted a short sale based on theirÂ circumstances. They are also going to want an explanation of the circumstances including what happened to put you, the homeowner in the hardship that you are in, ultimately causing you not to be able to afford your payments.
To qualify for a short saleÂ Bank of AmericaÂ will want to see a clearly demonstrated â€œfinancial hardshipâ€. Acceptable financial hardships include; relocation, loss of a job, payment increase or mortgage adjustment, business failure, reduced income, to much debt, illness or death, divorce, damage to property, incarceration, etc. InÂ any of the fore mentionedÂ cases,Â BofAÂ will typically agree to a short sale and will accept this asÂ payment in full on the loan (ie. the bank willÂ not demand cash or a promissory note).
* Note if your payments are current, there is very little reason for the lender to consider a short sale. If your payments are behind, then a lender may be more agreeable to negotiate with you.
Thus the documents listed above will enable you in your effortsÂ to successfully present a clear case toÂ Bank of AmericaÂ that you are eligible and deserving of a short sale.
HowÂ does a short saleÂ affect your credit?
The damage to a Sellerâ€™sÂ creditÂ is far more severeÂ if they go through foreclosure or give the lender a deed-in-lieu of foreclosure. The points lost on your FICO score may be as follows:
The Bank of America short sale application consists of the following:
|Listing Agreement||Two Months Bank Statements (most recent)|
|3rd Party Authorization||Two Recent Pay Stubs (most recent)|
|Hardship LetterÂ||Borrower Financial Form (completed directlyÂ on Equator)|
|Two Years Tax Returns (most recent)Â|
Bank of Americaâ€™s system is a little different than other lenders and homeowners need notÂ submit the short sale applicationÂ until an offer is received on their home.Â Once and offer is received the homeowner must first call Bank of Americaâ€™s Loss Mitigation Department at 866.880.1232 to setup a login.Â Agents may also initiate theÂ short sale for the homeowner by logging onto Equator but homeowners must still call to setup their personal login. Once a login has been setup, homeowners will then need to logon to the borrower end of Bank of Americaâ€™s website at http://www.bankofamerica.com/shortsale. Â
As your agent we can assist you in walking you through the process of initiating the short sale, preparing the short sale packageÂ and uploading the proper documentation, this in addition to marketing the home and securing a buyer, and negotiating the short sale on your behalf.
Once the required documentation has been uploaded, the bank will then assign a negotiator. One of the negotiatorâ€™s first task will be to order a BPO, or Broker Price Opinion of the property.Â The BPO is an appraisal or assessment of the homeâ€™s current marketÂ value and is a key step in the short sale process.
Once the BPO valuation is returned theÂ negotiator will submit the entire package for review and short sale approval. This entire process is currently averaging 30-55 days but varies depending onÂ the type of loan, whether or not the loan is insured with a PMI policy, if there are any additional junior lien holders, the bankâ€™s current work loads and the number of files the negotiator is currently working. Â Files that are set to close before the end of any given month receive priority treatment.Â
You can read about BofA Short Sales directly from their website:Â Bank of America Short Sale
Bank of America Ends the Suspense
Deficiency judgments and the possibility of the bank attempting to pursue the homeowner after a short sale are a concern for many borrowers considering a short sale.Â What these homeownersÂ fail to realize isÂ that the handling of the deficiency is part of the short sale negotiations and a real estate agent who isÂ experienced inÂ short sale negotiations, that is aÂ short sale specialist, will require that the terms of the short sale approval include the lenderâ€™s agreement to accept the reduced payoff as payment in full, and not to pursue the homeowner for a deficiency.Â Â
That said, Bank of America has decided to attempt to relieve distressed borrowers of this concern and in a recent statement made by their Senior Vice President of Credit Loss and Loss Mitigation, Mr.Â Jack Schakett, stated that if a borrower proves he can no longer pay the mortgage and has a few or no assets, Bank of America will waive itâ€™s right to a deficiency judgment during the processing of the short sale deal. Â But, if a borrower can afford to pay or has assets, the bank will try to negotiate a set fee for the borrower to pay at closing.Â â€œWe want to help customers who legitimately canâ€™t afford to make payments, but we donâ€™t want the oneâ€™s who have a bunch of money to just be able to walk away.Â These individualsÂ will have to share some of our loss.â€ Mr. Schakett acknowledged that short sales in which the bank agrees to accept lessÂ for the home than the balance of the loan are less expensiveÂ to process than foreclosures, and thus they want to encourage more homeowners to pursue this course by making it clear they do not intend to pursue homeowners for deficiency judgments.Â While new federal programs such as HAFA actually require first mortgage holders to waive deficiency judgments for eligible homeowners and provide incentives to lenders such as Bank of America for participating in these programs, thisÂ statement by BankÂ of America clearly demonstrates their desire to work with homeownersÂ to secure an option which best serves both parties.Â Â Â
Have a Bank of America or CountrywideÂ Mortgage and need to do aÂ Short Sale?
If youÂ have a loan with Bank of America andÂ are considering a short sale inÂ Columbus, Ohio or the Central Ohio vicinityÂ make sure you are working with a real estate agent who is a short sale specialist, while many agents claim to be proficient in these types of sales, fewÂ possess the knowledge and experience to accuratelyÂ call themselves short sale specialist.Â We have a working relationship with Bank of America and contacts within the bankâ€™s executive offices whom we can call upon when we required to ensure our clientâ€™s short sales are not only being processed in an expeditious manner, but ultimately that they are approved under the conditions and terms we require.
Bank of America is participating in the Home Affordable Foreclosure Alternatives Program, or HAFA and eligible homeowners may be entitled to $3,000 in financial assistance toÂ help with your relocation expenses.Â
Please call us at 614.332.6984 to address any questions you may have and toÂ discuss how we might assist you!
The Opland GroupÂ Specializes inÂ Real Estate Sales, Luxury Home Sales, Short SalesÂ in;Â Â BexleyÂ Â ColumbusÂ Â DelawareÂ Â DowntownÂ Â DublinÂ Â GahannaÂ Â Grandview HeightsÂ Â GranvilleÂ Â Grove CityÂ Â GroveportÂ Â HilliardÂ Lewis CenterÂ Â New AlbanyÂ Â PickeringtonÂ Â PolarisÂ Â PowellÂ Â Â Upper ArlingtonÂ Â WestervilleÂ Â Worthington
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