Harris Real Estate University Short Sale Exclusive.
The HREU Bank of America Short Sale Insider just returned from an exclusive invite only closed door meeting with Bank of America.
Highlights from the meeting:
* Bob Hora from BofA is the Short Sale, Deed in Lieu, REO, LandSafe Field Services Executive for Legacy Asset Servicing. He leads a team of 5,000 associates – those that you speak to regarding short sales and deeds in lieu through Bank of America as lender or servicer.
* Joining Bob was David Sunlin, Bob’s immediate junior who is Senior Vice President and Operations Executive for Short sales, Deed in Lieu and Real Estate Management for Bank of America – meaning he is in charge of real estate operations for Bank of America’s default loan servicing operations.
* Bank of America wants to do short sales more than they want to do loan modifications through HAMP or in house programs. There seemed to be a more significant emphasis toward short sales for avoiding foreclosure than through modifications. In fact, although they flew in about a dozen “expeditors” available for us to share specific file processing issues – none of them dealt with loan modifications. There was zero mention of principal reduction programs.
* Cash for Keys is on the front burner for implementation beginning September 2011 – expect to see a new ‘cash for keys’ program. It will be “an aggressive and meaningful” program to encourage homeowners to not ride out a foreclosure process for all its worth (ie: living in the property for as long as possible without paying the mortgage).
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* This new and aggressive “cash for keys” type program takes into consideration the real world benefits to the homeowner of the extended foreclosure lawsuit. Expect the new program to offer significantly greater amounts of financial incentives AND complete waiver of deficiency rights. This may be a huge opportunity for agents to convert homeowners who are taking advantage of the slow moving foreclosure process. If an owner is given $10,000…$20,000…$30,000 AND a complete deficiency waiver its safe to assume they will be more motivated to do a short sale faster.
* Bank of America addresses head on the misinformation regarding missed payments and short sales. Bank of America made it very clear that an owner absolutely does NOT have to miss any payments in order to do a short sale. Additionally, there is no longer a requirement for any short of hardship. NOTE: HREU has been coaching agents using this information for nearly 2 years. MANY agents still incorrectly believe that there needs to be a hardship and owners have to miss payments to do a short sale) The specific statement of policy was that delinquency is NOT necessary provided other factors of hardship and imminent default can be shown. Being underwater IS a hardship.
* A conflict arose regarding a statement made many times that a low FICO score was a determining factor in obtaining the coveted waiver of deficiency in the short sale approval letter. The conflict was relative to the statement that you can do a short sale without defaulting on the mortgage. David remarked that no conflicting statement was intended, and that waivers can be determined not merely on FICO scores but on other factors as well.
* Expect some pilot programs on new loans that add on to the escrow list not only real estate taxes and insurance, but condominium / property / homeowner association assessments.
* The fight to get short sales through is constantly being waged between lender and association. BoA is also considering setting up an association lien subset of negotiators to improve the short sale opportunities even with unpaid association fees. [We maintain that the better course of action for homeowners is to continue paying the association, as unpaid assessments can be the straw that prevents the short sale from succeeding.]
* The bad news is that the BoA time-line for short sales still deems 4 and a half months as acceptable. So the educated buyer (educated by their agent?) is a key element for retaining the buyer through the short sale process.