Bank of America making big changes to short sale process! (short sales, real estate market)

[Sunshine Rules]

For those of you who have a Bank of America loan and are considering doing a short sale

OR

if you are considering buying a short sale home and Bank of America is the lien holder,

you may want to know about some big changes that B of A is making to their short sale process as of this weekend that are designed to reduce the approval process to just 20 days.


On April 14th B of A's short sale process is scheduled to change as follows:

5 documents will be required for a short sale initiated with an offer:
(1) purchase contract with a Buyer's Acknowledgment & Disclosure attachment
(2) a preliminary HUD-1 [closing statement]
(3) IRS form 4506-T for the seller [to order a 1040 series tax return transcript for verification of hardship]
(4) B of A's specified Short Sale Addendum
(5) B of A's Third Party Authorization Form [this is signed by seller authorizing negotiator or agent to work with bank on behalf of seller]

They are also changing how the agent/negotiator submits the short sale package and the time frame to submit it is being cut from 14 days to 5 on counteroffers.

Bank of America is claiming they will respond back to these counteroffers within 3 business days.


So what does that mean for both sellers and buyers? IF Bank of America can actually streamline their process and actually give approvals for short sales in just 20 days, it will make short sales more attractive to buyers who often avoid them now because they do not want to wait 2, 3 or more months to see whether the seller's lender will approve the sales terms.

Other large banks will follow Bank of America's lead.

Currently short sales are typically priced at the low end of the market range to attract buyers willing to wait a long period of time for the short sale process to take place. If that process time is cut dramatically, expect sales prices on short sales to rise closer to "regular" sale prices, as the driving factor in lower prices will no longer be applicable.

Easier short sale process will most likely lead to more short sales. More short sales means less homes going to foreclosure and being sold by banks as REO's. Less REOs means a more stable market and reduction in what is known as shadow inventory of distress properties. It's a win/win situation for the banks, for home sellers and for home buyers.

[blueherons]

Wow that's HUGE!!!

I think it will most definitely impact the real estate market positively!

[NYtoOsprey]

we bought a short sale that was through Bank of America. It took 5 months. We didn't get to deal with humans, just a computer system. We were left to wait in limbo for undetermined amounts of time and then BofA would need documents immediately. It was a hassle but worth it. I know it was frustrating for the sellers too.

[RetiredBuckeye]

That sounds great! I waited six months for a short sale and it fell apart two days before closing.

[planthappy]

Don't believe it. I recently bought a pre-approved short sale with cash. BOA had the mortgage and my money in their bank. It took 2 and 1/2 months. The couple before my offer went through the process for the price had their loan fall through just before the sale. (6 months) The day I made the offer I had all the paperwork they needed. I think the banks drag it out hoping the value of the home will go up.

[baiaxaba]

I hope this is for real. I hate these short sales and the lawless process around it. I got 2 properties now under contract, both short sales, one with BofA and the other with Wells Fargo. It takes forever. I have already given small deposits on both, and it's been over 2 months.

[Big House]

I doubt anything that BoA says is going to happen - at least until I see it really happen.
I will say that they never let any houses go to the foreclosure auctions until very recently - Never. Now occasionally they will let one go here and there, so they are acting in a more positive direction to let all that back inventory reach the market in faster ways - surely just to write off some of the toxic loans they have.

BoA is still the most difficult bank to work with if you are a buyer - the process of getting a mortgage from them has been torturous for a number of buyers who for one reason or another turned to them first.

Either way they still have a huge backlog of nonperforming properties that they need to deal with. They probably are expecting the market to turn badly after the election is over, so they need to unload as many now as they can. Whatever they do - it will be self serving!

[Algenubi]

I had a short sale through BOA and took less than a month. That was last year.

[Big House]

Originally Posted by Algenubi

I had a short sale through BOA and took less than a month. That was last year.

Congrats!! :-)) You were one of the few success stories. They usually take months and months.

[brucerby]

Originally Posted by Big House

I doubt anything that BoA says is going to happen - at least until I see it really happen.
I will say that they never let any houses go to the foreclosure auctions until very recently - Never. Now occasionally they will let one go here and there, ....

Are you referring to just in Florida?...because in other parts of US, they have had plenty go to auction sale, but much less recently. I do agree about BOA, the left hand does not know what the right hand is doing.