Uncertainty with Bank of America COOPERATIVE SHORT SALES

As a homeowner, do you have financial hardships making it impossible for you to continue to pay your home mortgage?  Have you heard that a short sale could be a viable option for you but are unsure if this is the right option for you?

 

Well, with the nation's avoidance of falling off the seemingly apocalyptic "fiscal cliff" you may have heard homeowners collectively breathed a sigh of relief on January 3rd when the Mortgage Forgiveness Debt Relief Act of 2007 was extended through the end of 2013. One provision of this act is that homeowners that need to sell their home for an amount less than their mortgage (i.e. a short sale) will not pay taxes on the difference, which is the forgiven debt. But despite the New Year starting off so triumphantly, on January 15th did you hear the gasps of Bank of America mortgage loan borrowers?

 

As of January 15, Bank of America will no longer place temporary holds on foreclosures from occurring for borrowers participating in their Cooperative Short Sale Program before a potential buyer's offer is approved by the Bank of America short sale department. This change does not affect participants in the HAFA (Home Affordable Foreclosure Alternatives) Short Sale program.  I shudder at this Bank of America policy change because as a REALTOR (c) that works with their short sales, their approval process in some instances can still take over 9 months to complete despite the efficiency of the homeowner, prospective home buyer, real estate agents, and closing attorney.  This policy change can be very destructive to the morale of non-HAFA sellers and buyers alike, and may actually act to discourage buyers from working with all short sales being handled by Bank of America since the buyer may not be able to distinguish between the HAFA and Cooperative Short Sale Programs.  Such discouragement could spur an undermining of the economic recovery starting to occur in the real estate industry.  We need reform and legislation to promote nationwide standards in the short sale approval process.

 

On a brighter note, those in the Bank of America Cooperative Short Sale Program queue prior to January 15 are suppose to be exempt and afforded a temporary foreclosure hold.  Therefore, if you are a homeowner that initiated your short sale process with Bank of America prior to January 15th, hold them to this exemption!  Be vigilant for any foreclosure notices that you may receive and contact them immediately should you get a foreclosure notice.