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Bank of America Short Sales |
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Bank of America Short Sale Approval Letters
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Many people do not realize a short sale has 2 important parts.
1. Every approval letter virtually automatically comes with a release of lien or release of mortgage. Those are fairly simple to negotiate Many Realtors do not Realize they still have to negotiate for the release of loan balance on the second loan.
2. That is the difficult part of a short sale tranaction... negotiating a release of liablity for the remaining loan balance. In a way it is fortunate for Realtors that they are not not licensed to comment upon the sufficiency of the short sale approval letters. Because if they were able to comment on Bank of America's approval letters they would have to tell their seller's they are still on the hook for the remaining loan balance.
Bank of America has two basic short sale approval templates for Realtor negotiated short sales.
Each template has language such as this:
"Bank of America and/or its investors may pursue a deficiency judgment for the difference in the payment received and the total balance due, unless agreed otherwise or prohibited by law, if the short sale closes on the loan referenced above. In addition, if this loan is covered by mortgage insurance, the mortgage insurance company may reserve the right to pursue the seller for the deficiency based on the terms of the mortgage insurance policy Furthermore, there may be tax consequences associated with entering into a short sale. The seller is encouraged to seek the guidance from an independent tax advisor, and/or an attorney, before proceeding with the short sale.
If this short sale is contingent upon Bank of America and/or its investors receiving a promissory note, we will reserve the right to collect the full amount on the new promissory note which may lead to us pursuing a deficiency on that balance should the need arise. If the short sale does not close, then we will pursue all remedies under our note and mortgage. "
If someone tells you to accept this language, have them do so in writing and get their brokers signature on the letter.
If a lawyer tells you not to worry about this language... have him short you the case law and explain his reasoning in writing.
Some Bank of America Short Sale Strategies
1. Do nothing, or go through with the short sale as is ... (Not usually the smart choice)
2. If Bank of America is the owner or servicer of your second loan, you may to consider a short payoff on the second while staying current or reinstating the senior loan.
3. Hire an attorney who can show you they have gotten bank of america to change the offensive wording and get you released from the remaining loan balance.
4. Spend some time or money on a loan audit or lender liablity campaign. Bank of America may not be able to prove they made the proper releases on loans orginated by Countrywide. If you can support your demand for a recission they may begin negotiating with you. (in the past a variation of this strategy earned us our very own negotiator at CW.)
Know your options before you agree to do a short sale with Bank of America.
If you would like us to:
1. review your letter(s)
2. discuss your options
3. provide you with a sample letter we have used to get lender to change the wording
4. more
sign up below
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Last Updated ( Friday, 15 April 2011 )
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