Bank of America to test new short sale program

Short sales in the US have tripled since 2008.    Freddie Mac reported that short sales were up 600% over two years ago and in Freddie Mac’s financial statement for the second quarter of 2010  it was reported that there have been 22,117 short sales in the first half of 2010, up nearly 180% from 7,914 in the first half of 2009.

In the second quarter of this year (2010), Bank of America completed more than 25,000 short sales, almost three times the amount done in the same quarter last year.

On that note, Bank of America is testing a new program, according to REO Insider, that will target 2000 pre-screened homeowners who have either fallen out of the HAMP/HAFA programs or who have failed to qualify.

In the test program

  • No new documents will be required of the home seller because they’ve already submitted their documents for the HAMP/HAFA qualification process.
  • Deficiencies, or the difference between what the home sells for and how much is left on the mortgage will be waived.
  • A short sale specialist will be assigned by Bank of America to work with the real estate agent and the homeowner to market the property for 120 days.
  • Bank of America will provide a 6% commission to the real estate agent.
  • Once sold, the former homeowner will receive a $3,000 relocation fee.
  • If the home doesn’t sell, Bank of America will accept a deed-in-lieu of foreclosure in order to satisfy the mortgage.

The letters have already gone out to the selected home owners and they must select an agent within 120 days.  Home owners in the highly distressed states of Arizona, California, Florida & Nevada are being targeted.

Time will tell if this program will work.  Stay tuned!

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Amy Jones is the owner of Amy Jones Group Keller Williams Integrity First. The Amy Jones group has been recognized as the #1 Real Estate Team in Chandler by the Phoenix Business Journal and voted Best of Our Valley for 4 years.

The Amy Jones Group specializes in real estate in Chandler, Sun Lakes, Gilbert, Mesa, Tempe, Ahwatukee, and Phoenix.

Comments

  1. This doesn’t sound all that much different from the standard HAFA program, outside of a formal person being “assigned”, which was happening anyway.

  2. Great post. Have you ever spoken with Matt Vernon at Bank of America? He runs Bank of America’s short sale division. This article is interesting but I don’t think anything significant will come from this program. What we need to focus on is Fannie Mae’s new guidelines and how it is forcing homeowners into foreclosure without giving them ample time to pursue other options like a short sale. I hope you have time to visit my site. I will be posting some information regarding Fannie Mae’s new short sale and foreclosure guidelines soon. It is pretty interesting stuff.

    Thanks!

    Chris Lopez
    Principal, Smith Avenue Assets
    9500 E. Ironwood Square Drive ste. 101
    Scottsdale, AZ 85258
    480.398.0909 – DIRECT
    480.223.6443 – FAX
    chris@smithavenue.com
    http://www.smithavenue.com

  3. True. The logistics are similar except to say that this is for those who have not been approved for HAFA/HAMP so it’s another option at the very least.

  4. At least its a proactive step in the right direction by BofA

  5. Thanks Chris~ I’ll definitely check out your site.

  6. It is a proactive step, which I always appreciate.

    I have found a few of the smaller lenders have already begun advising their borrowers to complete a short sale. I find this so helpful for the seller/borrower, it gives them a bit of guidance that is needed in their difficult situation.