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bank of america HAFA short sale


Bank of America, your 3rd party vendors are giving HAFA a bad name – as if it needed help with that. Halloween is just around the corner, so beware homeowners, this tale is likely to scare you into NOT choosing a Bank of America HAFA short sale. Just when the industry is giving BOA some credit for streamlining their short sales online, they continue to outsource their HAFA short sales to companies like AMS and LRC. Since Bank of America HAFA short sales require their own special process and paperwork, the homeowner has the option to register to qualify for HAFA through a 3rd party vendor such as AMS and LRC. Once that long and dreadful approval process is over (if it ever ends), it then goes to normal BOA processing online to finish the short sale.

Case in point. We take a listing on a property back in March 2011, nice community, immediately get good offers, but the homeowner wants to go HAFA route to get the $3,000 if she qualifies. I explain to her the risk of doing a Bank of America HAFA short sale, but she wants to see how it plays out. So, the timeline begins. She sends them paperwork, they lose it (think HAMP loan mod program flashbacks), resends, re-lose, etc. Finally in June 2011 they have the paperwork they need. Yes, that took 3 months with lovely AMS. They order the appraisal to be done, which I meet appraiser at property. Apprasier sends the report to AMS. Guess what? They lose it. There goes another MONTH of trying to get that figured out. Now we are in August. At this point I explain to the homeowner that she may want to opt out of this program and go regular short sale, since we are getting short on time. She wants to hold out for the $3K incentive.

Glimmer of hope, homeowner finally gets a verbal approval for the HAFA program, which is nice but doesnt mean much since we need it in writing. Time goes by, it is now Sept. Keep in mind, this whole time AMS will not speak to the listing agent (me) since the homeowner must first qualify before AMS can speak with agent. Finally as we are getting close to the final approval (and the buyer is STILL hanging in there), AMS comes back and says file is declined due to a foreclosure sale date which now has been set. SEVEN months in the process of waiting for an approval and now the homeowner is 2 weeks away from losing the home. I immediately cancel the HAFA file and open it up regular short sale and request the postponement. That is where we are at this point.

We have successfully closed Bank of America HAFA short sales, and each one is the same, a long drawn out process that almost all homeowners regret waiting out for $3K (which is taxed by the way). BOA needs to get their act together and hire 3rd party vendors who can service these files better and make HAFA what it was supposed to be, a good alternative for homeowners facing foreclosure.
On a positive note, many other servicers have relatively decent HAFA short sale departments. But BOA, you need to work on it.

When you elect to do a short sale, your lender will usually ask you if you want to apply for the HAFA short sale, talk with us about the pros and cons before making that decision. You could end up saving yourself a lot of time and stress!

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The “Deficiency Evaluation Tool”, or DET. Wow that has a high-tech ring to it doesn’t it? Sounds pretty important. Turns out it could be. From what insider sources have told me, this is what Bank of America is using to determine whether their short sale approval letter will have any “deficiency” language in it. What’s that mean, you ask? Well, if a bank approves your short sale, on the approval letter they reserve the right to include verbiage that allows them to come back at a later point and ask for money from the you, the seller. How likely is that to happen? Hard to say, but you can see below what the criteria is for this and what factors are likely to sway them in one direction or another. Things such as was it owner occupied, who is the investor, was it purchase money loan, etc. Well, the good thing about living in California besides the weather is the California Civil Code of Procedure, Sections 580a through 580d, which state that under certain situations, California is an “Anti-Deficiency” State. But, you have to meet certain criteria, such as it must be owner-occupied, must be purchase money loan, and more. We always suggest talking to an attorney before pursuing a short sale, and then you can again consult with your attorney about the specific verbiage included in your Bank of America or other lender’s short sale approval letter. Since short sale approval letters vary from investor to investor, we don’t if deficiency language will be included until the bank has reviewed the seller’s short sale package, but keep in mind you always have the opportunity to review the letter before you agree to accept their terms.

Bank of America Short Sale Deficiency

Bank of America Short Sale Deficiency Tool

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