Bank of America Quietly Unveiling New Short Sale System

Any real estate investor or real estate agent who specializes in short sales will tell you that their results largely depend on the bank they're dealing with. A short sale is when a homeowner, who owes more on their home than it is actually worth in today's market, decides to sell their home – either because they're delinquent on their payments, facing a separate financial hardship, or needs to relocate. The real estate investor or real estate agent steps in to negotiate on the homeowner's behalf to get the homeowner's mortgage lender to accept less than what is owed, hence the term "short sale".

The short sale process is tedious and demanding to say the least. Some negotiators have reported wait times of over three hours to speak with someone in the short sale department at any given bank. There are mountains of paperwork to deal with, and the person working on behalf of the bank usually lacks expertise in real estate. The two largest mortgage lenders in America, Bank of America and Wells Fargo, are exponentially worse than any other lending institutions to deal with when it comes to short sales. Many investors and real estate agents won't  even deal with them anymore and advise their over leveraged  clients to just walk away from their homes as there is very little hope. In response to the ongoing short sale problems and lack of customer care, Bank of America has announced a new system to speed up the short sale process.

This new program is called HPO Short Sale (the 'H-P' stands for High Performance).Here are the details:

• 6% commissions to real estate agents. This is huge because on many deals, the lender opts to only pay a small commission to the real estate agent negotiating the deal. With all the paperwork involved in a short sale deal, real estate agents need more commission dollars and this new system is supposed to deliver.
• Every short sale negotiator or agent will be assigned a personal advocate who will guide the short sale until closing, using the new streamlined process.
• There is no pre-qualifying for sellers and no financial hardship required. Being upside down in the house is the hardship. This is unprecedented for investors, agents and homeowners. Think about how many upside down homeowners there are right now in America that would like to sell and then buy a new house at today's fantastic bargain prices!
• No documentation, including bank statements, tax returns and lender supplied financial worksheets to fill out for the seller. Generally speaking, getting a short sale approved mirrors the approval process for getting a home buyer a mortgage. While a home buyer needs to prove to a lender that he or she can afford the home by supplying bank statements, tax returns and a financial snapshot, a short sale seller needs to show the same documentation to prove to their lender that they cannot afford their home any longer. If it is true that BOA will no longer require a mountain of financial documents from sellers (as we will see in the coming months), then deals will close faster and more efficiently. This means more profit for investors and agents and a faster process for sellers which will leave them standing with a stronger credit score when the smoke settles.
• No deficiency judgment passed. A deficiency judgment is when a mortgage lender holds the seller responsible for the difference between a property's sale price and what is owed at the time of sale. Deficiency judgments are enforced through the courts. This is great news for underwater sellers as BOA also stipulates that with the new HPO system that no financial contribution from the seller of any kind will be requested to make up for the difference in sale price and the outstanding mortgage.
• The only requirements for realtors/negotiators are a listing contract, a purchase contract and an appraisal, though BOA claims the appraisal will not have an adverse bearing on the final acceptance.
• 2 week approvals. This beats talking to several different people who lose the seller's documents, don't understand the short sale process, having to wait on hold for hours at a time and getting nowhere while the seller loses their home and their credit scores.

If the new Bank of America HPO short sale system works, this is fantastic news for underwater homeowners, real estate agents and investors. It is important to note that this program is being quietly introduced, using only a beta test group of top short sale agents across the country.We will publish any additional information about BOA's new short sale system as soon as we get it.