Archive for the ‘Bank of America’ Category

Bank of America Issues Notice that May Affect Short Sales

Sunday, November 4th, 2012

Bank of America issued a notice recently to agents about the possibility of selling off loans in the middle of a short sale, which could drastically affect your short sale (and even cancel it last minute). It is very important that both homeowners and their agents understand what is happening, before listing a property for short sale.

As is customary, many lenders sell loans, even those that are delinquent – this is nothing new. But the fact that B of A sent out a notice about it is concerning, because of the timing that is mentioned for possible sales. The notice states that while in the midst of a short sale, borrowers’ loans may be sold to other servicers. If that happens, there is no guarantee that the pending short sale will close. Here are the steps by which this may happen (as spelled out in the notice):

•  Bank of America will send the homeowner a letter 15 days before the servicing transfer date.

•  Bank of America may call the agent to advise of the impacts to the short sale.

•  The new servicer will send a letter or statement advising the homeowner where to send payments.

•  If an offer has already been accepted on your short sale, a closing has been set and an approval letter issued, the new servicer will determine if the short sale will continue. (Yikes – a little too much discretion here!).

The scary part is that B of A is giving itself an out – why would a lender approve a short sale, only to then sell the loan while the property is in escrow? This makes not sense whatsoever. B of A states, “Real estate professionals should advise homeowners that, similar to foreclosure, a servicing transfer is a risk that may occur at any time during the short sale process. This is why it is important to move as quickly as possible to facilitate the short sale.” Wow – if I have to tell this to potential short sellers, why would they want to risk a short sale? Why would a buyer want to risk making an offer, with the very real prospect of losing money and not closing? And why would I, as an agent, want to risk spending marketing dollars and time in selling the property? NO ONE WINS!

It seems to me here that B of A is trying to cover it’s behind, but this warning and the described act is contradictory to short sale approvals.

The solution here is this: if you have a B of A loan and are considering a short sale, you need to have your agent or negotiator discuss this with B of A before listing your home. I would ask to get something in writing that B of A will not sell the loan after the short sale has been approved and during the escrow period, up until the deadline that is provided in the approval letter. This applies whether you have a first or second loan with the bank. If B of A is not willing to do this, you can either take a risk or look into other options.

This move is a step in the wrong direction by B of A, and thus they remain on the top of my “lenders who are not cooperative” list. What a shame that this bank – Bank of AMERICA, for goodness sake, is not willing to truly help American homeowners. Maybe they ought to think about a name change.

 

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B of A to Eradicate Second Lien Debt

Wednesday, October 3rd, 2012

Bank of America announced this week it’s plan to eliminate debt accrued on second lien mortgages for some lucky borrowers – approximately 150,000 lienholders across the country. This is big news for those who are underwater and would like to be able to stay in their homes. The lender says the goal behind the program is to help homeowners stay in their homes and build equity.

If you have a second mortgage that is serviced by B of A, you may soon receive a letter in the mail telling you your second lien can be extinguished. But don’t get too excited – the 150,000 letters are being sent out only to pre-qualified borrowers, and you cannot elect to be in the program. Apparently if you receive a letter your debt will be released within 30 days if you do not opt out of the program.

There is no data on which specific parts of the country may benefit the most, although one article mentioned the inland empire may see quite a few of these releases, as there were many second mortgages in that area and a substantial number of those loans that were issued by Countrywide (which was acquired by Bank of America). There is also no word on how credit may be effected, but if the bank is agreeing to release the debt in full there is a chance there may not be a credit ding…that remains to be seen.

While this is not a solution to preventing foreclosure, it could be a very powerful tool in it’s prevention, and those who are included in the program could really be receiving a life preserver. It is a new start and the chance to stay in a home that otherwise may not have been possible for much longer.

If you are the lucky recipient of one of these letters from B of A, please let me know. I would love to read the letter and understand the terms. You can email it to me at Rachel@LaMarRealEstate.org.

 

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