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Bank of America; Still Hope?

By
Real Estate Agent with Realty ONE Group Eclipse

May is just about over.  It went so fast when I look back on it but at times it felt like it would never end.  If you do much in the short sale world, you know that this was the big integration month for Countrywide and Bank of America. 

Fortunately, the two companies are not fully integrating their processes until 2010.  However, all of our countrywide reps now have B of A email addresses and all the loan statements show Bank of America.

One of the reasons that May seemed to drag on from time to time is one of the newer policies that B of A unveiled this month.  B of A has often had its challenges over the years when working short sales but if you have not been blessed with this new information you are going to love it.

In the world of shortsale negotiation the key is efficiency right?  Well Bank of America sure thinks so.  They have decided to become so efficient that they are having the team that receives faxes in the short sale department open the fax, immediately review for a complete package and either pend, decline or counter the offer.  Wow, that is definately efficient.  It makes sense to me to empower your team to do it all at the same time.

When we called in on May 12th to check on the receipt of a package we found out about this new policy. (you know where I am about to go with this don't you?)  "Great, so we faxed the package in last week, when will they be able to look at it and give us an answer?" 

"June First." ................

In the world of short sales that is a pretty good time frame for having a fully reviewed short sale offer. 

"So can you just let me know that you got the fax and I will follow up after they have had time to get to the file?" 

The answer was no.  They are not imaging the faxes into the system until they review them which is three weeks later.  So we send in a fax and have to wait for three weeks before we can find out if they even got it.  Even better, on the new "Short Sale Application" that B of A provides it says that "your fax confirmation sheet will be proof that we have received your fax.  Do not call us for 15 business days to allow time for review."

I am sorry buy how many times have you sent a fax and it got lost in cyberworld or fell on the floor or was missing a page or whatever?  Way to many times in my book to trust that a fax confirmation on my side of the machine is good enough.

So obviously Bank of America still has some short sale problems.  But check out what happened yesterday.

Here are the specs:                                                                                                          Countrywide (B of A) First mortgage; Bank of America Second Mortgage.  The property had a poor BPO (another story) and has lost several buyers and is now under contract for $92,000.  Just three doors down (nice name for a band) there is a property that we were negotiating a short sale on and the bank dug in their heals said no.  It is now listed as an REO for $87,500.  (Our short sale offer they declined was $95K Hugh!?!)

Bank of America is convinced that the subject property is worth $138K.  Not from any kind of walk through appraisal or BPO but simply through their highly proficient, fail safe automated valuation machine.  If you can hear my sarcasm I am not trying to hide it.  I used to work at B of A doing loans for them from '01 to '04 and if I am not mistaken their automated valuation system is part of the reason they have to have a short sale on some of these properties to begin with.  All we cared about at the time was hitting our numbers but there was many a time I had a client at my desk laughing about the value the system just gave their property. 

Oh and in addition that $138k price is about $20,000 more than the subject property just appraised for a few months ago. (on the same system)  Sorry, I did not know we were in such a highly appreciating market.  I must be in the wrong business.

Here is the point.  B of A has another policy that they will not accept any offers on properties that are less than a specified percentage below what they believe to be the value of the property.  At a value of $138k there are no dice.

So we got on the horn and hoping against hope itself, set off to negotiate the un-negotiable.  There are some moments in life that the stars align and even at B of A you find someone who truly understands the words you are speaking. 

The rep we had on the phone saw our cause.  She looked into every angle of our plight and went to bat for us.  Before our conversation was over she had convinced the system that the old BPO value was correct and that our offer was within guidelines and get this...

She actually sent us out our short sale approval letter.  All in the same conversation.

At the begining of this post I think most of us would agree that B of A is on a downward spiral at least in some regards.  However, after that conversation and the results from yesterday.  I truly believe there is still hope.  It will really depend on how many reps like that are still at B of A compared to how many of the opposite nature are filling the seats. 

When I was a VP at Bank of America they preached their five core values.  My favorite and one that I felt summed up all the rest was "Doing the Right Thing"  Sometimes the right thing meant taking a little more time, using your common sense and figuring out a way to make sure the policies did not harm the bank or the client.  If more reps at B of A will live this core value, there truly is hope for Bank of America.

Have a great weekend.

Comments (4)

Kathleen Cooper
Kathleen Cooper, Sposato Realty Group - Worcester, MA
Sposato Realty Group - Broker Owner

I hate Bank of America.  I can't wait for the day that they fall.  I think they are robbers and crooks and shouldn't still be around.  They practice very poor business skills in person and on the phone from what I've had to deal with.  They sneak secret charges and try to use overdraft protection on credit cards when accounts haven't gone negative.  They tack on all kinds of fees that they say "oh yes, our mistake, let me reverse that for you" when you call, but they are hoping you don't call...you don't catch them and they can continue to rob you.  Sorry to say, but it's true.  As soon as my listings that are pending sell and my escrow account is clear, I will be switching my business account far away from them.

Sincerely,

Kathleen

May 29, 2009 05:35 AM
Goodbye Active Rain
Out of Real Estate

Thank you for the info!  Very much appreciated!!

May 29, 2009 05:55 AM
Satar Naghshineh
Satar - Amiri Property and Financial Services Corp. - Irvine, CA

Hey Matt,

BofA's short sale policies are funny in a sad way. First off, the automated value system is actually www.zillow.com. From what I learned from outher active rain bloggers and by me asking them straight up, it seems like they use www.zillow.com. So their comps are off. I bet if you look on zillow.com the zestimate of your property will be 138k.

Another thing, they will reject a short sale in second position if they think the offer is to low from their automated value system! can you believe that!  For example, on two of our short sales, the first loan balances were over 400k and Bofa were the second lien holders. The market value for both properties were 250k (our offers were 230k). BofA rejected our short sale the next day (yes the very next day of faxing it in) because they felt the property was worth 280k. In California, who cares if you think the property was worth 350k! Bottom line, you will not get anything if this goes into foreclosure as the first is owed over 400k!!!  At least reject the short sale cause you don't think a hardship exists, missing paperwork, buyer walked or whatever. Do not reject it cause you think the offer was too low. Now if what the first was owed and what they thought the market value was were only a few thousand apart, I can understand rejecting the short sale. This has been my experience from a couple of short sales from them in early February. Maybe their company policies have changed since then. At least I hope so! However, the zillow thing became an issue on a Countrywide 1st position short sale last week when they closed my file (without me knowing) because they thought my offer was too low without doing a BPO. No suprise when I learned their estimated value was the same estimated value as zillow.com.  

Anyway, great post.

May 29, 2009 02:56 PM
Matt Side
Realty ONE Group Eclipse - Spokane, WA
Dir. of Broker Development

 

That is some great insight.  When I worked for them they did not use Zillow as Zillow was just emerging in the market.  How ridiculous.

As far as policy changes, not so far.  The craziest thing is when they think a value is high as you stated in your comment, now they are making the seller pay for an appraisal to prove them wrong. 

I completely agree.  If the first mortgage is 400K and the market value is considerably below that the second mortgage should be on their knees asking for mercy to receive anything the first mortgage will give them.  We had this discussion in our office just last week.  Some of these second mortgages don't understand that they are NOT driving the boat.

Thanks for the comment.  Good luck with the CHL deal.

May 30, 2009 05:39 AM