San Jose Real Estate * REALTOR ® * Richard Gonzalez

Until November of 2009 Bank of America / Countrywide short sales were difficult to navigate and a communication challenge to say the least. Our average time to receive an approval ranged from four to six months. As a result Bank of America created a partnership with equator.com thus reducing the short sale approval timeline from 6 months to 45 days.  For this reason and because there continues to be confusion with the process I decided to provide 3 steps to successfully initiate a B of A short sale and navigate through this new system.

One small task at a time

Step 1 . Listing agent must Register on equator.com  once your REALTOR has informed B or A that you are short selling your home. B of A will then assign the short sale to your REALTOR in the equator.com system. Your REALTOR will then upload a laundry list of documents one task at a time. Tasks are the basic process initiated by B of A to ask for the necessary documents needed to start the short sale. Your REALTOR will be asked to upload the following:

• Purchase contract
• MLS information
• Buyer Pre-qualification including social security numbers
• Picture of home
• Authorization from seller to allow REALTOR to talk to B of A

Step 2. Seller needs to notify B of A that they want to start a short sale. equator.com will provide a password to the seller and the seller must have an email address of their own to access the system.

Step 3. Seller must upload independent of each other (one task at a time) the following documents.

• 2 yrs tax returns
• 2 months bank statements
• Pay stubs for the last 30 days
• Hardship letter
• Financial statement

Challenges:

• There are still many people who don’t have an email address or are not comfortable uploading documents into the system.
• Sellers will get blocked out of the system if they have too many failed attempts at accessing with an incorrect password(it happens all the time).
• Sellers must respond as quickly as possible when given tasks. Failure to do so will slow the process down and may stall the process until requested documents are uploaded.

Goal:

Once B of A receives the information they will begin processing your short sale. 2010 is primarily expected to be a short sale year as banks begin to develop new processes to handle the paperwork involved.  Knowing what to expect and being prepared is key when navigating the B of A short sale system.

Bank of America Short Sale Approval Process May Improve.

Today I had a conversation with a short sale negotiator from Bank of America and was informed that Bank of America is implementing changes to there approval process for short sales waiting to be approved.

This new fast track process (as I refer to it ) applies to loans that do not have to be approved by an outside investor.  For example if you have a loan that does not require an outside investor approval the negotiator simply runs the numbers in the computer and approves it if the computer shows a favorable calculation.

Hopefully this will shorted the horrid time lines we are experiencing when  working with Bank of America short sales.

Countrywide now Bank of America is now asking sellers to sign a 10% promissory note relative to the approved sales price and it appears to be getting worse before it gets better. For example if you are selling your property for $300,000 in a short sale you would have to sign a promissory note for $30,000 payable over 25 years at 0% interest.

Maybe I was wrong in thinking that those homeowners with countrywide short sales would benefit when it was announced that Countrywide would cease to exist and would officially become Bank of America.

It must have been the past 90 days of improved negotiations with banks and loan servicers in general that gave me that warm fuzzy feeling, but alas it was not meant to be.

I originally thought it may have been a glitch in the system, after all it’s not uncommon for investors to ask the seller to make some sort of a contribution but for whatever reason either some big wig or investor came up with the great idea of kicking sellers in the teeth while they are down (metaphorically speaking).

So far the last four short sales we have been negotiating with Bank of America have dropped the promissory note bomb on us. Take a guess at what our seller’s response has been. How would you respond? Some banks and servicers are making things worse rather than better, over the past year or two the common sense approach for the decision makers of these short sales have dwindled down to the absurd.