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George, Home Buyer in Emerald Isle, Glendale...

How long does it take to get an extension from BofA on a Short Sale Approval? What's the likelihood of getting one in the 1st place?

Asked by George, Emerald Isle, Glendale, CA Fri Aug 27, 2010

My agent tells me that we're waiting for an extension on a short sale from BofA to proceed with closing the escrow. There's only 1st loan on the short sale property. We got the short sale approval about 30 days ago, got the property inspected, appraised by my lender, title insurance/papers ready and loan approved. To proceed with the loan documents, my lender is wanting to see a written extension of the Short Sale. There's a trustee sale on the property in about 25 days (9/20/2010). My offer is at or very close to the fair market value of the property. My question is: What's the probability of getting an extension for the short sale approval and how long does it usually take?

Thanks in advance for your response.

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Shel-lee Davis’ answer
BEST ANSWER
George:

This is how I am understanding your situation.
1. Short sale approval was given 30 days ago and has expired (hopefully not) or will expire before lender can fund the loan.
2. You will be able to close right away, ie. there is nothing on your side holding up the documents and/or the funding.
3. The date of the trustee sale is irrelevant, as you will be able to close long before 9/20/2010.

If I understand this correctly, then this is what needs to happen.
1. The listing agent / short sale negotiator for the seller has to contact their counterpart at B of A and tell them the three items above. Hopefully, they have been in continuous communication with the B of A negotiator and updated them along the way on the status of your loan.
2. You may need to get a letter from your lender stating the same thing.
3. B of A, once they are told about the situation and provided any and all documentation they are requesting will take 24 - 48 hours to produce the updated short sale approval. (They often say it will take longer. The listing agent has to press the issue that they can have their money right away if they get this out right away, but may lose the buyer if they dawdle.)
4. B of A will want a date certain that they can expect their money. They may charge something for this extension, however, they usually grant the first extension, especially if it is just for a week or 10 days without penalty. They will threaten a penalty, so hopefully the listing agent knows how to call their bluff.
5. Then be ready to close right away and celebrate your new home ownership.

Hope this helps. You can contact me directly if you need further clarification or guidance. Dare to Dream.

Shel-lee Davis, QSC®
Certified Distressed Property Expert – CDPE®
Short Sale & Foreclosure Resource – SFR®
Certified HAFA Specialist – CHS®
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty
http://shel-lee.listingbook.com
0 votes Thank Flag Link Fri Aug 27, 2010
George -

Unfortunately, no way to predict the time line on the extension. However, it sounds like from what you have said you are very close to making this all happen. Work with your agent and be diligent with the loan officer to see if there are ways to work around the extension.

Good luck,
CJ
1 vote Thank Flag Link Fri Aug 27, 2010
Some times banks wait the week of the trustee sale date to give extension. You may be looking to receive the extention 09/13/2010. Deends on the negotiator. The listing agnet on this property is the one to be contacting the lender of the seller to push this move forward. if your agent has authorization from seller to contact their lender , he or she can do so as well.

Since Trustee sale date is up in 25 days, it should not be a problem to get extention from B of A. It take lots of calls from realtors to get that extention though . do not wait till 09/13.

All banks are different . Their rules change all the time. it takes lots of deligence to close this. It can very well close, if you call the banks twice daily., and make every body on the same page. Good luck. Heba
0 votes Thank Flag Link Fri Aug 27, 2010
George,
If I understand everything correctly, it is your lenders problem.

In the end, our experience shows that it usually is best to get the extension the last week before the trustee sale. It sounds like you lender is not good with handling short sales. If they cut the docs you can close in a few days.

The interesting thing about short sales is how much it depends on the actual people involved. Your agent has to be good and experienced at short sales. The person they are talking to at the bank has to know what they are doing. Hopefully you did not get a new trainee at BofA.

But, bottom line, if you have everything signed from the bank and the trustee sale is 25 days out, tell you lender to close the deal. That takes no more than a few days from the time they cut docs.

tommy lee
DRE #01723594
tommy.lee@dilbeck.com
323-821-2292
0 votes Thank Flag Link Fri Aug 27, 2010
George
It is always in the buyer's best interest to meet the timeline set by lenders in shortsales.

I am confused as to why your lender could not close in the timeframe given by B of A. That is a red flag.

30 days to close should not be a problem.

It is likely that there may be a change in terms. (sometimes lenders charge a "late fee"). Talk with the listing agent. Be prepared for challenges.
0 votes Thank Flag Link Fri Aug 27, 2010
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
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