Bostonjohn: So far you have moved through the process at a good clip, however, I would suggest you NOT rest easy on this. You may not know that there is now what is called a Shared Loss Agreement in place for banks with the FDIC whereby the FDIC will step in and cover anywhere from 80%-95% of the bank's loss in a foreclosure. The loss is calculated using the ORIGINAL LOAN BALANCE, not the amount that the bank paid for the loan. Depending on the amounts owed on any given property the FDIC could conceivably step in and cover anywhere from 80%-95% of the loss. Taking advantage of this new program, it can be FAR more lucrative for a bank to not even deal with short sales or loan mods and just let the property go to foreclosure. (especially AFTER the BPO is done when they get a true sense of what its worth is on the current market) Being WHO B of A is: I would guess that they may be one of the banks that can do this.
There is actually a chance that they will turn you down and go to foreclosure. If they do, you can wait around for 2-3 months in the off chance that you will see it come back on the market as an REO. You may get lucky and the numbers could work out for B of A to go forward with the short sale. This is just ONE MORE of many added risks for buyers when they try to buy a short sale property... If it works out, it can be great... if it doesn't and the interest rate and/or home prices have gone up during that time, you may price yourself out of the market altogether. Only YOU can determine if all the risk is worth it to you.... Good Luck!