I attended a seminar given by Allen Sealenbinder, VP of Portfolio Rentention with Bank of America, Western Region. This seminar was held at Black Gold Golf Course in Yorba Linda, California at the end of April, 2011.
Here are some of the bullet points from this three hour seminar:
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In a short sale, cash means nothing to the bank. The highest net is all the bank cares about. So, buyers agents calling saying their clients' offer is cash carries no weight as it might in a regular sale.
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Home owners under water need to worry about more than just the 1st and 2nd lien holders. Private Mortgage Insurance companies sometimes are often involved (especially if the home owners put less than 20% down on the property when they purchased). In a short sale transaction, there can be up to SIX or MORE parties to the transaction that need to approve the short sale - The 1st Lien Holder (e.g. Bank of America, Chase), the 2nd Lien Holder (who has the 2nd), the 1st mortgage insurance company, the 2nd's mortgage insurance company. Add another loan to the equation and you can see how complicated this becomes. Even if 2 of the parties approve the sale, sometimes the mortgage insurance company will hold out and throw a monkey wrench into the transaction.
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Question #1 to ask home owner: "How many months are you delinquent?" Allen says that the banks are not postponing foreclosures anymore that are 12 months or more delinquent.
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Question #2 to ask home owner: "What are you willing to do to sell this property?" When it comes down to a settlement with the bank, the home owner may be required to sign a promissory note or make a cash contribution to pay off the 2nd lien holder (for example). Is the home owner willing to do this? If not, the short sale route may not be right for them.
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Credit is affected either way - short sale, deed in lieu, foreclosure. Doing a short sale is better for the home owner's credit than a deed in lieu or foreclosure. In other words, it will take longer to repair credit with a foreclosure than a short sale.
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Bank of America, as a Servicer, has over $2.2 Trillion in mortgage loans. They OWN only 10% of these loans. 90% of their loans are owned by an Investment Firm.
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So, there are delegated loans and non-delegated loans. Non-delegated loans are the best because Bank of America can make the decision on approval, counter, or denial. With delegated loans, B of A has no say in the decision - it is the Investor (whom we have no idea who the are) who makes the decision.
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Promissory notes are not the worst thing on earth. The bank sometimes will stretch the pay back time line to 20 years and they are often 0% interest.
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HAFA is a government program that gives under water home owners relocation money (cash) for doing the short sale. The GOOD on HAFA is that there will be no cash contribution required and no pursuit of deficiency. The BAD on HAFA is that some of those Investors (who own 90% of the loans) will not participate in HAFA, some Mortgage Insurance companies will not participate in HAFA, and the process for HAFA approval takes longer and requires more paperwork. (B of A is a HAFA participant, but it really comes down to the Investor in most cases).
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Wachovia and Wells Fargo are two banks that have the most stream-lined process for the shorts sales. Bank of America does not have the luxury of these banks because of the volume of loans they are dealing with.
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When it comes time to short sale, it is best to get with your agent and have them call Bank of America's short sale concierge with a current mortgage statement and let them know that you are short sale'ing the property. This will expedite the short sale. There are 9 departments that you can be transferred to...3 departments are inside B of A and 6 are outside B of A.
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Questions to ask: Are you behind on your income taxes? (IRS Lien) Did you have work done on your property and NOT pay a contractor? (mechanic's lien). Are you behind on your HOA dues (if applicable) Home owners MUST be up front and forthright about all debts. If anything is swept under the rug, it will come out eventually and will not give the real estate agent time to deal with the issue.
Do you need to short sale your home? Do you need to talk about your options? Call Nic Petrossi at 714-272-3646 or email Npetrossi@yahoo.com Nic specializes in short sales and regular sales for Yorba Linda homes, Placentia homes, Brea homes, Fullerton homes, Anaheim Hills homes, Orange homes, and all of Orange County.
To check foreclosure date of your property go to RECONTRUST
To get more information on Fannie Mae loans go to KNOW YOUR OPTIONS
For Realtor fiduciary responsibilites and liabilities go to FTC.GOV and put in "Mars"
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