Popping up on Twitter and elsewhere today was this new article from Bank of America claiming they have improved their short sales process.
There is no date on this article so it’s hard to say when it was originally published, but here are some key pieces of information:
High unemployment levels, declining home values and other factors facing some families have doubled short sales in the last year. The result: the slowing of an already time-consuming and intensive process in which participation from multiple parties is typically required.
… because of the increased volume, presumably, that hit Bank of America and the under staffing that (had?) existed there.
We clearly recognize the need to improve the short sale process for both our customers and the real estate professionals who are critical to a successful transaction. In response to the rise in short sale volume, we have updated training, enhanced our technology and established a dedicated team of short sale professionals that is available to help customers and real estate professionals navigate the process.
Sounds good. We knew this already, but it’s good to hear it from the horse’s mouth, so to speak!
We are also piloting a cooperative short sale program that includes proactive outreach to customers who have been unable qualify for a home retention solution, or have fallen out of a workout program, to measure their interest in a short sale. The property will be listed at market value, and Bank of America will work with the customer and agent throughout the marketing period. If an offer is received, we will be in a position to approve the sale within two weeks. This program is currently in a limited pilot stage, and we hope to expand it soon.
This is interesting. It’s almost an attempt to list the price at market value (which is almost always perceived as too high) and then have a quick turnaround situation. There is little information here on what qualifies an individual for this program; other than those who have fallen out of a workout program. We assume the rigors of getting into a workout program are thus the prerequisite for this pilot program.
Bank of America has taken big steps to shorten response times and improve overall communication. We recently deployed a secure, password-protected internet portal called Equator (formerly known as REOTrans). Bank of America is the first to provide this around-the-clock platform for real estate professionals and homeowners to track the status of short sales. In real-time, homeowners, agents and bank representatives can see and exchange documents, track important dates and deadlines and significantly improve communication between all parties involved.
Mixed bag on equator. We have attempted to communicate with Equator to see how we could integrate Short Sale Artisan with equator and unfortunately we got a big fat “not something we are looking at”. Hopefully in the future Equator will link in better and open up their platform to allow direct data submission from short sale software providers, but it’s not in the cards as of today. Short Sale Artisan provides a much less stringent way of interacting with all users than Equator, and as far as we know Equator does not have a homeowner-facing side.
(If you haven’t seen it, here is the Bank of America Equator Short Sale Guide)
Finally, the article has a few tips Bank of America suggests:
There are many things you can do to help minimize this lengthy process time:
- Advise clients to contact their servicer as early as possible
- Ensure all customer financials are in PDF format
- Help clients complete all documentation accurately and as soon as possible
- Make sure the purchase offer is a legitimate offer and fully executed
- Submit the best possible purchase offer at fair market value
- Provide listing information and comparables to support price
Frequent causes of delay to be aware of:
- A change of buyer or agent at any time may require process to revert to an earlier step; notify client’s servicer immediately if there is any change
- Investor/mortgage insurance approval is needed if the servicer is not fully delegated to approve the short sale
- Release on a second lien must be received prior to issuing an approval letter
- If customer has filed bankruptcy, the trustee must provide a court document that approves the sale of the property
These are all relatively benign suggestions. Short Sale Artisan helps with most of these – especially the PDF documentation suggestions and creating a reasonable offer at a fair value with detailed analysis on why. Remember to keep in mind the bank’s motivations during a short sale transaction!
We aren’t 100% sure what all this means. It doesn’t sound like much is new at Big Red other than some new pilot program to bring up short sales to homeowners who have defaulted while participating in hardship programs, but any focus on short sales is typically a good sign that we are moving in the right direction.
If you are a pilot member or have other comments on the Bank of America Short Sale Process, post it in the comments!