Bank of America Refines the Short Sale Process

On April 11, 2012 by Karen

Bank of America Refines the Short Sale Process

This is a pretty significant change and, in case you didn’t see this on the BofA site, I want to share it with you here.

Bank of America announced it is changing its short sales procedures beginning April 14. This change will, hopefully, shorten their decision time down to 20 days – a time frame most of us can live with. Currently, we have experienced 90 days or more between the time we submit documentation and the time we hear back from the bank. These long response times make buying short sales almost impossible for an end user.

Here is the new information from the BofA website:

The new Bank of America short sale process will enable short sale specialists to complete tasks such as document collection, valuations and underwriting at the same time, reducing the time from initiation to closing.

Before April 13, you must complete the Submit Short Sale Offer, Upload Offer Documents and Upload Supporting Documents tasks in Equator for all short sales submitted with an offer. Your file may be declined if these tasks are not completed prior to April 13.

Starting April 14, you’ll see several changes:

Five documents will be required for short sales initiated with an offer:

We are requiring the new Bank of America Third-Party Authorization Form for short sales initiated beginning April 14.

All messaging will remain in Equator.  Agents will receive a standard notice to log in and retrieve their messages.

New Timeframes: Five (5) days to submit a backup offer when a buyer has walked

So, with the new process, are you more likely to take on a short sale?

8 Responses to “Bank of America Refines the Short Sale Process”

  • Been waiting 3 weeks to hear back from BoA. Now for some reason they have to start the process over. Mean while the roof has a leak and continues to deteriorate every time it rains. Will never go through this again with BoA.

  • So sorry, Jeff. Unfortunately, yours is not an unusual story.

    I hope everything works out for you. Please keep us updated.

  • We submitted an offer on a short sale to the seller and she accepted our offer, then it was sent to Bof A, we have been waiting two weeks for a reply! Do they have a certain amount of time to respond or do we have to wait for months?

  • They can take all the time they want.

    Are you working with an agent? Short sales can be very difficult.

    The best time to work on a short sale is when you don’t need to move and can take all the time the bank wants.

    Keep us posted, please! And let me know if you have any other questions as you go through the process.

  • I entered into a short sale Sept 13, 2012 and yet to receive an approval. I committed to 120 days and its now 150 plus days. I thought we were approaching a close date when Hud advised me that BOA want 90% of proceeds and the calculation was short due to taxes, therefore the price would need to increase $1200.00. I haven’t heard anything more from the realtor, hud or negotiator. All the realtor can say is she hasn’t received the approval in writing. An offer was placed on the property AS-IS and withthe understanding the owner would stay in the home until closing. she has sinced moved into another home and left the property open to vandalism. the realtor keeps saying the home is occupied but i know different. why does it take so long to approve a short sale?

  • Tina:
    We have gone through your exact experience many times and are now determined to not do short sales again. Have you listened to the short videos in my blog post Why the Banks Never Bailed Out Homeowners? Quite enlightening.

    There are also other posts where I’ve written why it’s not necessarily in the banks best interest to finalize a short sale. The banks are paid what is owed to them by the mortgage insurance that the owner paid through their mortgage. The bank is again paid for any short fall by the government bailout money. The bank is paid a third time by taking the property back through foreclosure and selling it on the open market at a closer to retail price. So, the bank is not losing any money on this property and has no reason to finalize a short sale.

    We find short sales to be incredibly inefficient and painful experiences for both the seller and the buyer. If we treated our customers this way, I’m quite certain we’d be put out of business and probably into prison. The system is incredibly broken and I know it doesn’t help to hear it, but you’re far from alone. This is the nature and accepted process of a short sale.

    If you want the property and have the time to wait, I hope it works out for you. If you have the opportunity to cut ties and move on with your desire to purchase, you may want to consider it.

    Please let us know your outcome with this situation. It will, eventually, resolve.

    Thanks for taking the time to ask.

  • I’m waiting, as a seller, for approval for a short sale. I, the negotiator and my realtor started this process in November. The buyers have been patiently waiting all this time and every few weeks, BoA seems to need me to sign something else, or sign forms I’ve already signed, or sign yet another extension and so on and so forth. In the meantime, we’re bleeding money on the HOA fees, the insurance fees and the the utilities that we can’t disconnect (Xcel energy changes a monthly fee just to have their lines connected to the house, whether or not the gas is turned on or not). This totals over $200 a month and there’s no sign that BoA will ever allow the short sale to close. I’m stuck in this horrible limbo (no job, no insurance, incurable illness requiring expensive meds) and I’m beginning to think the bank will never approve it. I’m also starting to hear about cases where the banks don’t even bother to foreclose, and the distressed homeowners are the ones who are stuck with the taxes and HOA payments… unless of course they die before those entities can come after them. I have the feeling that my so-called short sale is one of these. I send emails to my realtor and my negotiator, but the BoA negotiator isn’t even speaking to them anymore. Twenty days? That’s an incredible joke – it’s been month after month of nothing except resubmitted paperwork, new forms, extra forms with no results and no interest on the part of Bank of America in allowing the short sale. I’m about ready to give up and just let the place go into foreclosure, as my credit has already been ruined by BoA’s foot dragging. I should have just mailed the keys to them and called it good, instead of subjecting myself to this nightmare.

  • And, BofA has recently sold off a lot of their mortgages and all of their mortgage servicing, meaning they no longer even collect their own mortgage payments. They have always been difficult to work with and I am afraid you are caught up in the middle of an even bigger mess.

    Problem is, BofA is under no obligation to respond to you. They will be paid for their losses by your mortgage insurance and will, no doubt, also receive government money to reimburse loss.

    I can’t recommend what you should do but don’t let the fight harm your health further.

    So sorry for your predicament. Thanks for writing and I’d love to know the end of this story when you reach it.

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