Between the two big steps they have taken along with all their many other smaller changes, they have gone from being one of the most difficult banks to work with, to a bank who’s short sales we look forward to taking on. 

Approval times have gone from 6-12 months, to 1-3 months.  One negotiator works the file from start to finish and both first and second loans are handled by the same negotiator. 

The new Equator System allows the homeowner and the agents to see where they are at in the short sale process at any time. 

If you are an agent or a homeowner, the contact number for Bank of America’s short sale department is: 

1.866.880.1232  

8am-9pm EST Mon-Fri. 

HOMEOWNERS: 

If you are a homeowner and have a loan or loans with Bank of America, their short sale process is very similar to most other banks. 

CALL: The first step in a Bank of America Short Sale is to CALL and determine if a short sale is the best option for you. You can contact us at anytime via phone or email to review your situation. 

You may be eligible to sell your home in a short sale, if: 

• You have a hardship, such as a job loss, divorce or medical emergency
• You owe more than your house is worth
• You’re unable to afford your current monthly mortgage payment
• You’re unable to modify your current home loan

HIRE: If you determine a Short Sale is the best option, the next step is to hire a license real estate agent that is experienced in short sales and dealing with Bank of America. Hiring an experience agent can mean the difference between a successful short sale an foreclosure.
Once you have hired an agent, the next step is to get your property put onto the market and begin marketing for buyers/offers. The listing will be handled like a standard real estate listing.  Our team aggressively markets the property at market value in an attempt to obtain an offer in the first 30 days. 

MARKET:

OFFER: When an offer is received, the short sale will be “initiated” with Bank of America, at which point you will upload financial information into their short sale system and your agent will upload the offer and all other supporting documentation. If there is another lien holder in addition to Bank of America, the short sale package will also be sent to them and the short sale will be negotiated with both banks. 

REVIEW: After the offer and supporting documentation is uploaded, Bank of America will begin their approval process, which will include ordering an appraisal on the property to verify that the offer received is inline with the fair market value of the property.  

APPROVAL: After the review process is completed, the bank will issue their approval letter and the closing of your property will take place.  The closing is typically a standard 30 day escrow. 

For Homeowners – Here is some resourceful information on Bank of America

	Bank of America’s instructions on using their online short sale system
	Bank of America’s financial worksheet

 A big concern with Bank of America over the past couple years has been their approval letters.  For some time, they have only been using one approval letter which contained the verbiage that they reserve their right to come after the seller for the deficiency balance after the close of escrow.  It also contains a vague statement stating that these terms apply as long as they are allowed by state law.   They still use these letters and it is very important to you as the homeowner that (1) You seek appropriate legal & tax advise while going through the short sale (2) Have an experienced agent handling your short sale that understands how to negotiate to have this verbiage removed. While we can negotiate the verbiage in the letter, we cannot offer you tax or legal advice, but do have an excellent tax accountant and attorney that we can refer you to. 

Here is an example of the Bank of America Deficiency letter and Bank of America Non-Deficiency Letter.

Bank of America Deficiency Letter

Bank of America Non-Deficiency Letter

REALTORS: 

If you are a Realtor or Attorney, the phone number for the Bank of America short sale department is the same: 

1.866.880.1232  

8am-9pm EST Mon-Fri. 

You will need to create an account on the Equator System in order to be able to submit a short sale. The site is http://www.equator.com/.   Below is the Bank of America training manual that explains how to create an account and use the system from start to finish. 

	Bank of America’s training maual for Equatort Short Sale system
	Bank of America’s training manual on HAFA

For Attorneys – Here is some resourceful information on Bank of America

Bank of America’s Attorney registration manual for Equator

Bank of America Short Sale | 

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Orange County Short Sale Short Sale Orange County

With the recent boom in foreclosures hitting the nation, it’s almost certain that if you watch the news or read the news paper, you have probably heard the term “short sale”…  But do you really understand or know what a short sale is?  For many, they are still unclear.

Put simply, a short sale is when a lender or lenders, accept less that the full amount due on a loan when the property is sold.  The lender will usually accept the short sale to avoid the time and expense of a foreclosure, but do require that the owner of the property show some type of a “hardship”, or reason that they can no longer afford the home and need to sell. In a short sale, the lender will pay all of the fees that are involved with the sale, including the Realtor’s commissions.

With home prices down over 29% across the nation, many homeowners are finding themselves in a position where they no longer have any equity in their property.  And even if they have a small amount, when a borrower is in default on a mortgage they not only owe the back payments but also may owe late fees, back taxes, attorney fees, etc. This can add up quickly to eat up all the equity the borrower had in the property. If the borrower is unable to bring the account current the lender will then foreclose on the property. With a foreclosure, the lender can lose up to 40% of the mortgage amount because of the extra costs involved with foreclosing on a property: attorney fees, court costs, lost interest, eviction costs, property maintenance costs, and selling costs. Foreclosing on a property can take anywhere from a few months, up to 2 years in some states. Therefore, it is sometimes in the best interest of the lender to accept the short sale.

It also can be in the best interest of the borrower. They will not have to endure the time and stress of a foreclosure and their credit may not be as adversely affected as it would with a foreclosure. It is quicker and easier and does not subject the borrower to the embarrassment of a foreclosure.

How does it work?

The first thing the borrower should do when they can no longer afford a property is to contact the lender immediately. The last thing a lender wants to do is foreclose on the property. When contacting the lender, they have departments that work with people who are behind on their payments to resolve the situation and will be able to direct you to their departments. 

Unfortunately though, these departments are typically understaffed, overworked, and have very poor systems in place.  Getting through to someone and getting them to actually work on your file can be a very frustrating battle.  This is why it is important to hire a Realtor, or Realtors that are experienced in short sales and dealing with the lender that hold your mortgage.  If they are experienced, they will have the numbers and the contacts to get the deal done.

Once you have notified the bank, the first step will be hiring a Realtor and placing your property on the market. With most lenders, they will not review any paperwork or consider you for a short sale until your property has been listed on the market and a buyer has submitted an offer.  Once that has taken place, there is a lot of paperwork the lender will require along with the offer in order to consider the short sale.  The information required may include:

· Income documentation such as 2 years of tax returns and W-2s, along with one month of pay check stubs to verify the borrowers’ income.

· Bank statements to verify the borrowers’ assets.

· Hardship letter – this letter will describe for the lender the reasons the borrowers are in the financial position they are in and will ask the lender to accept the short sale. Borrowers should make this letter sound as sad as possible and back up the story with any documentation you may have such as medical bills, etc.

· Financial Worksheet – this worksheet will show the borrowers net montly income vs. all of the monthly expense, and will be used to show that the borrower is unable to afford the property.

· Fair market value for the property –depending on the lender they may require aComparative Market Analysis (CMA) from the Realtor justifying the price of the property.

· Purchase agreement signed by all parties.

· Preliminary HUD1 – This will show the proceeds of the sale of the property after the mortgage is paid off and all other closing costs and fees are paid. This will show the lender what they will be receiving as the short payoff.

· Listing agreement.

· (And many lenders have their own specific forms that are required in addition to everything above.)

Once the lender receives all of the above information, they will hire an outside third party to complete either an appraisal on the property or a BPO (broker’s price opinion) to determine the fair market value of the property.   They will use the information provided above to make sure there is a hardship and they will compare the offer that is presented against this value to determine if the short sale makes sense, or if they can obtain more by going through foreclosure.

Once the lender has reviewed all of the information, they may or may not approve the short sale. If they do not approve the short sale they will proceed with the foreclosure. If they do agree to the short sale, the transaction will move forward the same as a normal sale, you will close on the sale of your property and the lender will take the loss.

So, is the borrower off the hook?

Not necessarily. The lender still has options to try to collect this shortage. As a condition of the short sale the lender may require the borrower to sign a note to repay the shortage or bring in cash at closing.  The lender may also require that the borrower agrees to the lender retaining their rights to pursue a deficiency at a later time. This is why it is important to work with a team that is experienced in Short Sale and to consult a real estate attorney to fully understand all of your options.

There may also be tax implications in a short sale or foreclosure. When the lender forgives the amount of the shortage, they will report that amount to the IRS and the IRS will send out a 1099 showing the shortage as income.  Each person’s situation is different and they may be protected from having to pay taxes on that amount through the “Mortgage Debt Relief Act” or through showing insolvency. I cannot offer advice on that and highly recommend that any person considering a short sale or foreclosure consult a tax professional to fully understand the implications of a short sale or foreclosure.

Short Sale San Diego – San Diego Short Sale Experts

Are you in default or on your way to foreclosure and have a loan or loans with Wachovia?  Are you considering a Short Sale? If so, contact us today! We have successfully negotiated multiple Short Sales with Wachovia, with the owners being released from any further deficiencies. 

If you have any loans with Wachovia and are considering foreclosure or short sale, contact our team today to discuss your options and find out if a short sale may be right for you.

Their contact number for their home retention group (short sale department) is:

(866) 521-3828

The fax number to send your complete package to is:

(866) 517-7976 Fax

Download the Aurora Loan Servicing Financial Worksheet and Short Sale Package Information

What you will need to include in your short sale package to Aurora is:

• Cover letter with everyone’s contact info & summary of the offer
• Hardship Letter with any proof of hardship that can be documented (Job termination letter, medical bills, etc to support your assertion that the bank should take less)
• Listing Agreement with all signatures
• Aurora’s Financial Worksheet
• 2 months most recent bank statements showing income
• 1 month of most recent pay stubs
• Complete offer to purchase contract with all signatures
• A CMA for the property
• Proof of funds for Cash Offers or Pre-Approval letter for financed deals
• Net Sheet / HUD-1 (payoff is not necessary)

When sending everything, make sure to send as clear of copy as possible and lable each section. I have posted another blog HERE about the importance of sending a clean package.

I hope this helps. Please feel free to contact me with any questions.

Glen

San Diego Short Sale Experts

Silvercrest Realty Group

Wells Fargo Short Sale Guide

San Diego Short Sale Experts / San Diego Short Sale Experts

Short Sale Story – Channel 2 News Dever

San Diego Short Sale Experts / San Diego Short Sale Experts 

Are you in default or on your way to foreclosure and have a loan or loans with Select Portfolio Servicing / SPS?  If so, contact us today! We have successfully negotiated multiple Short Sales with SPS, with the owners being released from any further deficiencies.  

If you have any loans with Select Portfolio Servicing / SPS and are considering foreclosure or short sale, contact our team today to discuss your options and find out if a short sale may be right for you.

San Diego Short Sale Experts  / San Diego Short Sale Experts

San Diego Short Sale Experts

San Diego Short Sale Experts