The rumor mill around the short sale world is that Bank of America is playing hard ball on the 2nd mortgage HELOC's. A recent call into my office presented some challenges for a local seller who found out that he had two choices. One, he had to agree to pay 85% back to Bank of America through a promissory note on his HELOC or they would not approve the short. His second option is fairly obvious which is allowing the home to go to foreclosure and force the banks to file a deficiency judgment. This is one of those things that makes me scratch my head a bit. I can't imagine anyone would agree to 85% with a promissory note, but I am sure some sellers will go for that.
From what I am hearing Bank of America has decided to instate a number of new policies on both the first and second mortgages, purchase money and HELOC's. Supposedly this 85% agreement on the HELOC with a promissory note is non-negotiable. I hate that word as my belief is everything is negotiable, but some banks really don't negotiate which amazes me. I find it interesting that the government is trying to incentivise banks to push for short sales and yet some banks would rather take nothing instead of something.