A couple of weeks ago I was invited to attend a seminar sponsored by Bank of America which was designed to help agents who negotiate short sales better understand the new systems they have instituted.  And in fairness, I do believe that the banking giant is trying to streamline the chaos we’ve been dealing with for the past several years….I’m just not sure it’s really working.

I have recently been involved with three B of A short sales, two as the listing agent and negotiator, and one as the buyer’s agent.  Short sale listing #1 was a Cooperative Short Sale, similar to the HAFA program.  It was managed through Equator but took nine months to close.  It was a total nightmare. Listing #2 is a VA first mortgage that is NOT handled through Equator and requires a separate secure email system, (this one has also taken way too long).  And finally, the short sale purchase has a B of A equity line that also does not use Equator or any system, and in fact was moved to three different offices.

So what I’ve learned is that there is no ONE system that is used by B of A, and it totally depends on the loan type.  Now I’m no systems analyst, but it would just seem to make sense to me that ALL short sales should be introduced into Equator as pretty much all the same documents and forms are required.  The file could then be assigned a negotiator in a particular department depending on the loan type, but at least ALL files would be in the same system.

The one good thing that came out of the seminar was that it qualified me to receive access to their new online escalation tool.  So now when I seem to be getting nowhere, and have exhausted the phone and email protocol, I can escalate the file and receive a response to my concern within 24 hours.

If you live in San Diego County and have questions about a short sale, and want to know if it’s right for you, please don’t hesitate to give me a call for a confidential consultation.

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Last March, I participated in a Bank of America webinar where they introduced their Cooperative Short Sale Program.  I remember being cautiously optimistic because the speaker promised that the Bank would respond to offers in 10 days.  Well, it’s now been five, yes five months since I uploaded an offer for the Cooperative Short Sale purchase of one of my listings.  We are finally in escrow and set to close on April 6th, but this has been, to say the least, a rocky road and not what I would call a “cooperative” negotiation.  Here are a couple of the low points:

  • The amount that B of A was offering to the 2nd lien holder was incorrectly communicated to  me.  They offered one amount and  then later came back with a much lower figure. I had to escalate the issue  and get pretty angry to make them stick to the original amount offered.
  • Shortly after finally getting  an approval in the first week of February, our buyer lost her job and we had to substitute her husband as the buyer.  Same transaction, no changes except the loan and sale were now going to be in the husband’s name.  It took over a month to get a new approval, and that was after I again had to escalate the issue.

Here is what I see as a big problem with the whole system:  Although the Equator platform is supposed to keep all parties in communication, it really doesn’t work that way.  Bank of America farms out the work of negotiating their Cooperative Short Sales to Asset Management Outsourcing, Inc., AKA, AMORecoveries.  So during the whole “negotiation” portion of the short sale, the agent for the seller is only in communication with a case worker at this company.  If you do need to escalate a matter to B of A directly, they might not be in the communication loop as far as the file and Equator are concerned.  Additionally, I find communicating through Equator sketchy at best.  Every step of the process is a “task” that gets accepted, completed or denied, and let me tell you, a short sale is simply not that black and white.  The only way I really got anything accomplished was when I could actually speak to someone.

Once you finally get an approval, the file becomes the responsibility of a “closing specialist” back at B of A.  So the person you’ve been dealing with throughout the whole process is now out of the picture.  When we had to substitute the new buyer, the file went from our “closing specialist” at B of A, back to AMORecoveries, to a different negotiator who thought it was an entirely new file!  I thought I was going to tear my hair out!

So I’m not a fan of the Bank of America system or the Cooperative Short Sale program that was supposed to streamline the approval process.  And I know that without going up the food chain and fighting for my seller this deal wouldn’t be closing.

 

Got a tough short sale in San Diego County?  Give me a call!

 

 

Well, as noted in Part 3, the clock started ticking on Monday, October 17, when I submitted the offer and estimated HUD1, and let’s see….today is Wednesday the 26th. Despite several emails and phone calls, no one has contacted me to confirm the new negotiator or let me know what the next steps will be. I feel as though the file has already slipped between the cracks…..

Just left a message for a supervisor…..

OK. Now it’s the 28th and I’ve no reply from anyone so I called again and finally got hold of a supervisor. And it appears my gut feeling was right and the offer is no where to be found. Arrrrggghhh! The supervisor set-up a task for me on Equator so at least I could be connected to the file, though they still have not requested I upload the offer.

So far, this has been a bit uncoordinated because the homeowner started the process and I’m coming in after the fact. More on Monday.

On November 1 I finally received a task to upload the offer into Equator and then on the 3rd received notice of some “additional items” needed by the mortgage insurance company…so it took about 2 weeks to actually get it in the system.

In the offer we requested a pay-off to the 2nd lien holder in the amount of $10,000, which is what the 2nd lien holder told us it would take to get it approved. On November 8 I received a counter offer from B of A….they only want to give the 2nd lien holder $6,000. I forwarded the counter to the 2nd lien holder and am waiting for a reply.

The good news is that B of A did not counter the offer price, which is considerably lower than what they originally requested, and they were pretty quick about issuing a counter. I’m not very hopeful however about the 2nd lien holder accepting $4,000 less…will keep you posted. We’re now at 26 days on this B of A Cooperative Short Sale…..

Yippee! We finally have an offer that looks like it will stick. So on Monday I submitted the offer to B of A and a complete short sale package to the new servicer for the 2nd lien holder. As you may remember, the borrower had already started the process for the Bank of America Cooperative short sale before we even put the home on the market, so at this time the only items requested by B of A include the offer and an estimated settlement statement.

So the clock started ticking on Monday, October 17. Let’s see how long this process really takes. Bank of America of course advertises that their cooperative program is executed more quickly than a traditional short sale….

Yesterday, I received an email from B of A notifying me that the original negotiator to whom I had emailed the offer and HUD statement had been promoted and she would no longer be my contact. A new negotiator has been assigned and I was assured that the file would be passed to her and that I could expect to hear from her shortly. Nothing so far today….

As you might remember, shortly after I received this short sale listing the homeowner received a notice that the 2nd  mortgage had been sold to a new investor, and the servicing was also transferred away from Bank of America. There is absolutely no equity in the home to provide collateral backing for the 2nd  TD, so it seems odd that any investor would want to buy it.

Weeks later, the transferred loan is finally in the system at the new servicing company and I was able to speak to a representative.  She informed me that we would need to submit a complete short sale package directly to them for review and approval.  Now this is very different from what  B of A told me…..they said that they would negotiate the approval with the new servicer.  Hmmm.  So, do I believe Bank of America and assume that they will take care of getting the approval for the 2nd, or do I negotiate directly with the new servicer?

Well, I think we all know what assume stands for, so there is no way I’m going to trust that  B of A will get anything done for us with the 2nd  mortgage!  I’m having my seller pull together all of their financials and required documentation for submission and I’ll negotiate directly with the 2nd lien holder.

Meanwhile, we have yet to receive an offer, so at my request Bank of America has approved a second price reduction.  I’ve been doing some heavy Internet marketing, so hopefully the lower price will help get the right buyers in the door, soon.  Will keep you posted!

Of all the articles I’ve written, posts about Bank of America and their Cooperative Short Sale Program seem to draw the most attention.  Is that because people have been disappointed in the results?  Or are they nervous about potential problems?  Well, I thought it would be interesting to share the progress of a new B of A Cooperative Short Sale that I’ve just listed to see just how good, (or bad) the process really is now that the program has been around for a while.

This sale is a bit different than most short sales I’ve done, as the owner had already begun the Cooperative program when I was hired.  Thus a lot of the initial paper work was already in the system, and the bank had ordered an appraisal.  The turn-around time on the appraisal was fairly quick, and I was pleased to see that the suggested list price approved by the bank was reasonable according to all of my research, so at least we are not dealing with an unrealistic starting price.

We did lose a couple of days as I tried to connect with the B of A representative, who will be my primary contact, but we finally spoke and she seems pleasant and knowledgeable.

So just when I thought this might be smooth sailing, the homeowner received a notice that the 2nd mortgage had been sold to a new investor, and the servicing also transferred away from Bank of America.   So how do you sell a 2nd mortgage that is upside down?  There is absolutely no equity in the home to provide collateral backing for the 2nd TD, so it seems odd that it was sold at this stage of the game.

This of course throws a bit of a wrench into the works as I will now have to negotiate a totally separate approval with the new note holder, through the new servicing company…..once they even figure out that they have the account.  Sigh.  We will have to see how this affects the B of A approval process…really not sure what to expect at this point, but I’ll keep you posted.

In March of this year, I reported on the newly introduced Bank of America Cooperative Short Sale Program.  As noted in that post, the two key elements of this new program are the relocation fee of $2500 paid to the sellers, and the timeline.  Instead of waiting for the short sale seller to find a buyer, this program was designed so that a seller could submit all paperwork in advance and be approved prior to a purchase offer.  According to Bank of America, by approving the property value and seller hardship up front, this would decrease the amount of time needed to process the actual sale and approve the buyer once an offer is presented to the bank.  At that time, the bank indicated this would shorten that approval timeframe to about 10 days.

So when my negotiator called last Friday to let me know that Bank of America had determined that one of my files might be eligible for a Cooperative Short Sale, my first thought was, “Great!”  I figured that we’d be able to get this closed quickly as we already have a strong buyer, and my sellers would receive $2500 to help with moving costs.

I then asked about any down-side to my sellers accepting the Cooperative Short Sale versus a traditional B of A short sale, and my negotiator’s response was surprising.  She said that in her experience, (and she has been a full-time short sale negotiator for several years), the Bank of America Cooperative Program takes about 6-8 weeks LONGER than their regular short sales.  Longer???  The normal B of A processing time is 6-8 weeks, and now participation in this program would essentially double that?  According to my negotiator, the reason it takes longer is because there is a more intense review of all seller financials – probably needed to justify the $2500 relocation payment.

My first thought as a Realtor protecting my seller’s interests, is that participating in this program could double the chances of a buyer to walk!  It is hard enough to keep buyers waiting 6-8 weeks for an approval, but to extend that period for another 2 months is asking for trouble!  I have also heard it rumored that by performing a more intense financial review B of A is actually looking to see who has sufficient assets to target with a deficiency judgment.  I don’t have any evidence to support this, but it could pose a potential risk if there is any question as to whether or not the seller’s loan is protected under the state’s anti-deficiency laws.

I presented the choice to my sellers who quickly decided that the risk of losing their buyers was not worth a $2500 gamble.  Who knows?  Their file might have been processed quickly, but on the other hand we might have ended-up back at square one looking for a new buyer.  It is definitely a choice that each seller will have to make based on their unique situation.  If anyone out there has experience with this B of A program, I’d love to hear from you!