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Bank of America Short Sales |
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Bank of Amerca Short Sales
We have seen two main Bank of America Short Sales approvals.
The typical short sale approval template (for junior loans) reads like this. in pertinent part:
"This letter confirms Bank of America's agreement to accept your short sale offer on the above referenced loan on the following terms:
Bank of Americas agrees to accept ____________ in certified funds as payment towards the above referenced loan. Upon
the banks reciept of $ ___________.00 and signed copy of the final Short Sale HUD-1Form the bank will release the lien and charge of the remaining debit as a collectable balance. Our recovery department will be in contact with you to make arrangements on this balance. Will report the account toe the credit bureaus as "Charged Off" and show the balanace remaining owed to Bank of America. Please note that any subsequent refund received by the bank will be applied to the outstanding balance of the loan." ....
you may also see this:
"By signing below, I hereby acknowledge and agree to the terms stated in the above letter agreement and understand that after the application of the short sale proceeds to my loan balance, I will remain responsible for the upaid balance. I also acknowledge that the status of my loan will be reported t the credit bureaus as "Charged Off".
There is another Bank of America short sale approval which they tend to issue on former Countrywide loans.
Those short sale approval letters look remarkable similar to the one you find on this link (alternative Bank of America Short Sale approval letter,)
All these short sale letters can also be (balanced?) by the inclusion of a sentence which says "where allowed by law".
Sometimes you will even hear the negotiator say that they will not come after you for the deficiency in California because it is not allowed by law.
If you are fortunate enough to have them say that to you over the phone, I suggest you pin that statment on them as best you can.
(Update - we recently recieved an approval on a first where a B of A negotiator crossed out some of the language we requested. So in certain circumstances they may make changes to the template.)
Some Bank of America Short Sale Strategies
1. Go ahead and do the short sale on their terms and hope they never come after you for you assets or your salary in the future.
(this strategy is being used by many, but it might not be that smart for people with jobs or assets.)
2. If Bank of America is the owner or servicer of your second loan, you should consider working on a short payoff on the second while staying current with the first.
3. Hire someone who can show you they have gotten bank of america to change or cross out the offensive wording.
4. Hire someone to get the BofA short sale department to write a side letter saying they won't seek the deficiency
5. 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 for our files.) But, we have had to start again when BofA took over countrywide.
6. Do the short sale, but prepare the file for a fight in case the lender sends the collection people out after you later.
Many non lawyer short sale negotiators have told us that their lawyer friends say that the one action rule prevents lenders from seeking a deficiency collection after a short sale.
If hired to do so we could make the same argument, but we note that we have found no case law supporting that argument.
5. If you have a senior loan or loans covered by CCP 580b - you may wish to inform Bank of America they may not be negotiating in good faith.
Know your options before you commence a short sale with the Bank of america short sale department.
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Last Updated ( Saturday, 15 August 2009 )
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