Bank of America’s New MLS Requirement for Short Sales

Paula, I don’t think it will ever end.  It does not stop me from wishing it does.

MaryKay, Our perspectives come from our own vantage points given our MLS rules. Clearly the MLS rules vary.  Many MLS’s added a new reporting status for short sales. I know mine did.

Kimo, It depends. In an equity sale … my answer is NO.  With a short sale, the seller accepts the offer which is submitted to the lender for approval.  During that time the seller cannot accept other offers … other than back up offers. In this case, why would I continue to market a property that already has an offer?  Make sense?

Richie, BofA … the Biggest of the Big Bad Banks … someday maybe Mr. Google will tell us they are out of business … and we will all start doing business with our local credit unions.

Michael,  Havoc, chaos and a bunch of agents who know what they are doing … pushing  back with a collective voice of reason. 

Neal, Interesting thought.  I’d like to think that if an agent’s file is DRE compliant and the agent complied with all of the terms of the approval letter … there would be no grounds for a lawsuit. But, who needs grounds to sue … especially in California!

Wanda, I agree.  BofA needs to focus on processing short sales and let the agents tend to their business.

Thom, That is a scary thought … me working for a bank!  Talk about a conflict of interest – HA! I had several opportunities to list bank-owned homes.  I declined.  I did not want to be the bank’s [fill in the blank].   Great explanation to Lynn!  Thank you.  It’s taken me some time to respond to all of the comments.

David, Those will always be agents who will comply with the MLS rules … and a few that won’t. And those that don’t are not complying for their own reasons not because BofA dictates otherwise.

Rosemary, Well said. It is not an option. All professional agents will comply with their local MLS rules.  Ignorance is not a defense.  “I did not change the status because BofA told me not to.”  The MLS would likely say … BofA is not your MLS. I am your MLS and you abide by my rules not what BofA tells you do to!

Michelle, I fully understand.  Believe me, I do. BofA cannot now nor will it ever be able to mitigate or prevent fraud via the MLS.  There are other lawful ways to do that.  I won’t specify here … perhaps that will be great fodder for another blog. 

John, A true picture is what all professional and ethical agents want to see.  We already have some agents that knowingly and willingly violate the MLS rules by not reporting status. For the most part, we are in self-regulating business with little consequence for bad behavior. IMO.

Rain, There was so much push back on BofA they had not choice by to correct their error.  If BofA could eliminate agents in short sales or assign them like they do REO’s … I am sure they would do that in a heartbeat!

Michael, Nice twist … collusion with the banks by fraudster agents! 

Debbie,   They don’t have any business in a short sale transaction or in dictating how agents report MLS status.

Stacey,  The bank is not a party to the contract between the buyer and seller.  The bank has no business dictating how MLS status is reported.  It’s okay that this does not make any sense to you … because it does not make any sense. 

Karen, We can only sell a property to one buyer. The seller accepts the offer. The lender approves it.  If the lender does not like the offer price the lender can counter. Short sales are not managed like REO’s. 

Lori, Greed is the name of the lending/banking game.

Ed & Tracy, One thing we know for sure … the next step is to follow the MLS rules no matter what BofA says!

Evelyn, My issue is that BofA has NO BUSINESS dictating how an agent is to report status. They are not licensed brokers/agents, are not members of the board, etc.  Further, what BofA attempted to accomplish with their nonsense cannot be accomplished by MLS reporting status. It’s that simple. Nothing more. Nothing less.

Elizabeth, I understand what BofA was attempting to accomplish as well. There will always be agents behaving badly mostly all in the name of greed.  MLS reporting status will not stop them. Crooks will find a way. It’s only a matter of if they will get caught.

Michael, Try regulating humanity via the MLS – HA.

Ron, I think many would agree that the status must change.  It is misleading to keep a property status active when the seller has signed an offer … including an offer that is subject to lender approval. 

Keith, BofA has no choice.  BofA is not a party to the transaction.  Subject to lender approval does not make the bank a party to the agreement. Nor does it make them licensed brokers and agents or able to dictate how MLS status is to be reported.  BofA would not accomplish proving “open market transaction” by their silly demands.  It just would not. We all know how many properties are listed Active and the “open market” cannot get in to see it.  Meanwhile, the listing agent with access is showing the property and bagging the buyer. 

Hella, Public portals is an area that does need to be changed.  So many properties are listed as Active and they were closed 6 months ago. Maybe BofA should implement their silly demands on Realtor.com, Zillow, Trulia and other public sites!

Tom, You get it.  Agents either follow the rules or they don’t. If they don’t and are caught and reported it is up the MLS to deal with them. BofA attempting to dictate where they have no business will not prevent agents from behaving badly.

Richard, I can relate to that.

Jackie,  Good.

Richard, I do not double end my short sales.  As you know I could double end every single one of them.  I am hands-off with buyers. In fact, I refer all buyer leads on my short sale listings to agents in another brokerage. If they bring the highest and best offer their client’s offer is accepted. If not, so be it. They do not have an inside advantage because I referred the buyer. If they did there would be no point in my referring.  This is how I believe all short sales should be managed.  I can sleep at night … my conscience is clear.  It’s shameful what happens in this industry with little to no consequence. 

Tni, They have “control” when they own the property.  Clearly managing their REO inventory is easier because they do have control, or at least the illusion is that that have control. It would depend on which agent the asset was assigned to.  They just can’t prove “open market transaction” via MLS status.  You get that!  If BofA wants to catch the agents committing fraud there are at least 100 better and more effective ways of doing so.

Rob, Good point! 

John, It means many backups in my area as well.  Low inventory is creating challenges for many.

Juli, This has generated a great discussion.  Not everyone gets this … yet most do.  Amen to that! AR rocks! What BofA tried to do is not defensible, IMHO.  A Big Bad Bank attempting to dictate to agents, who they do not own or control, how to report MLS status as a means to mitigating or prevents agent fraud … RIDICULOUS! Or as our one and only dear Lenn Harley would say … BALDERDASH!

John, I could not agree with you more.  Counter-productive … and none of their business.

Marte, And they are outraging the masses of good agents who are trying to be part of the solution rather than the problem.  We all want the agents behaving badly out of this business.

Erica, What number are we on now? (LOL)

Cliff, As Rodney Dangerfield would say … show us a little respect.

Terrie, Our own industry cannot control those agent behaving badly.  There is little to no consequence for the behavior. It’s maddening for sure.

Gina, It’s really all a joke. There are no regulators regulating the regulations. Money is power and that power and money acts above the laws … with little consequence.

Annett,  It's good to know that BofA has no issues with your method of selling short sales.

Curtis,  BofA retracted their initial short sale update in its 2-14-2013 update stating that brokers should follow their MLS rules.

Than,  It's just bad business to be deceptive.  You are doing the right thing ... but you already know that :-D

Pamela, Of course BofA does not have an answer for that!  BofA does not believe it is behaving badly.  Therein lies one of the issues.  Thank goodness only 10% of your Temecula market is short sales. 

Bob, Now there is a concept … BofA mandating that the agent actively work the file.  They actually meant active status on the MLS.

Dorte,  My sentiments exactly.  It’s bad enough that we already have agents not following their own MLS rules.

Katerina, Well said!  I do not go up against BofA with money … clearly they have more money and bigger attorneys than I do.  I go against BofA with knowledge and a mindset fixed on doing the right thing … the lawful thing … no matter what they tell me I am supposed to do.  I know you manage your business the same!

Lenn, That is true.  The update came out on 2-14-2013.  It does not undo the fact that BofA has NO BUSINESS making such a mandate in the first place! 

Bob, Thank you!

Jeff, The updated letter, which came out on the 14^th, is noted in my post. BofA was attempting to help prevent/eliminate fraud, aka agents behaving badly, with their mandate.  BofA was also trying to prove an “open market transaction” which would not prove a darn thing even if the status was kept active.