Bank of America, along with the former mortgage giant it absorbed, Countrywide, had such an atrocious reputation for loan modification; many borrowers wouldn’t even attempt a short sale. Many real estate agents also would strongly discourage their clients from making offers on Bank of America (BOA) properties due to the unlikelihood of receiving a timely approval. It was not uncommon to see approvals taking 6 months or more. Buyers would withdraw their offers in frustration, leaving sellers having to begin the process all over again.
Last fall, Bank of America expanded its on-line portal previously used to manage foreclosure listings, to include short sales. Distressed borrowers and their agents could now directly request a short sale. You will have to have an MLS-listed property, along with a valid offer to purchase from a prospective buyer.
Agents can now quickly upload the necessary documents into the system. Previously, we would send long, physical faxes which then would have to be organized, sifted and managed into a file. Eventually, the file would be assigned a series of negotiators to process and approve the file. It could take months just waiting to be assigned a negotiator. Here in the Las Vegas area we would routinely lose buyers during this long waiting period. We are now typically assigned to a negotiator in 2-3 weeks. I now have files taking only 2 -3 months from start to finish, whereas under the old system I still have files over a year old!
There are some drawbacks. Government-backed loans such as FHA, VA along with Home Equity Lines of Credit (helocs) cannot be processed through the Equator system. The system also does not allow for the complexities of an individual’s financial situation. The system only speeds up the processing, but does not automate the terms associated with settling the debt. That requires a strong real estate agent to represent the seller’s interests with respect to the sale terms, shortfalls due to the loss (deficiencies), promissory notes etc. A seller should also consult an attorney and tax professional with short sale experience to help evaluation if a short sale is a good option for them.
Paul Rowe is the managing listing agent for the Sena Team at North American Realty of Nevada. The Sena Team can be reached at 702-376-0088.