Bank Of America Checks Credit to Approve Short-Sale

By
Real Estate Broker/Owner with Marie Bost~Broker~Edisto Real Estate Co.~www.mariebost.com

Thought this might be of interest, just read this on a blog from another agent in the country. Have not verified this, you might want to check it out if you deal with Bank of America on Short Sales. Also, has anyone heard about sellers who do short sales are receiving tax bills at the end of the year from the government for the amount of the short sale being taxes as regular income.

Marie

 

 While speaking with Bank Of America today on one of my short-sales under review I learned some new information. 

The negotiator explained that the investor who will be approving the deal will be pulling my seller's credit information to verify that the seller also stopped paying other creditors. 

If BofA determines that the seller has continued payments to everyone else they will likely request a promissary note or cash contribution before approving the short-sale according to this BofA employee. 

My belief is this is one more change to discourage people from attempting a short-sale.  People who are walking away with a job and still paying their other bills need to either plan on giving them a promisary note/cash contribution to accept the short-sale or plan on a foreclosure on their credit. 

Realtor's who take these listings better get the facts upfront from the seller and make sure they are willing to make this contribution if requested by BofA.  I personally think that what BofA is doing should be illegal and prosecuted.  They have no right to pull a consumers credit without their authorization and providing a credit report has never been part of the short-sale package or disclosed previously.  Legally they have no recourse if the property is foreclosed upon and it normally is easy to demonstrate that BofA benefits from accepting a short-sale vs. foreclosure option. 

 

Comments (4)

Charlie Ragonesi
AllMountainRealty.com - Big Canoe, GA
Homes - Big Canoe, Jasper, North Georgia Pros

That is a new one on me. I guess these guys are getting more and more seroius. It is a sign of the times though, Usually the last thing you stop making payments on is the home

Mar 17, 2010 04:57 AM
Dennis Duvernay Broker/Owner
Hillview Realty - Northbridge, MA

Interesting....I have to admit when I hear BOA I cringe....then I have to decide if I am up for the challenge....usually I just move on to less of a headache....lol

Mar 17, 2010 05:00 AM
Drick Ward Property Management / Broker Assoc
NEPTUNE REALTY - Virginia Beach, VA
"RealtorDrick" - Experienced Representation

I'll bet you gave your lender the right to pull your credit when you signed for your loan.  I know I reserve that right with tenants in properties I manage - if they start missing rent or if they have been marginal tenants, I want to know if their credit has changed from when I put them in the property.  It's the same thing for a lender who loaned money in good faith and now wants to know if they are the only ones being stiffed or if you truly have a catastrophic situation that warrants relief.  You can't have your cake and eat it too.  You either HAVE a hardship or you DON'T.

Mar 17, 2010 05:03 AM
Camille O'Donnell
O'Donnell Properties - Queenstown, MD

Marie, I tend to agree with Drick, if you have a hardship then it involves your whole financial world. You can't be fooling the lenders now, when everyone has their radars up and checks and balances are at an all time high.

I have empathy for the buyer/homeowner but at the same time, somewhere and somehow the buck has to stop somewhere. Because ultimately, when all of this debacle stops, who do you think is going to be paying for the slack in the housing market?? You guessed it-you the taxpayer when the rates spike up in the next few years.

Right now, Realtors are being targeted to sign up for a multitude of get rich short sale programs. I suspect once all the lenders start doublechecking on their clients, many will be forced to walk the foreclosure trail of tears.

Mar 17, 2010 12:45 PM