This month, Bank of America is hosting a seminar for Florida real estate agents to help them get buyers qualified fast and efficiently. If you’re interested, it’s being held at the Title Express of Weston on October 30, 2012, at Total Wines, 15980 Pines Blvd., Pembroke Pines (details here). Actually, it’s Bank of America’s Short Sale Division that is overseeing this program – and the fact that Bank of America has created its own Short Sale Division gives you an idea about how dedicated the lender is to getting short sales done.
You know Bank of America, with its red, white and blue logo: after all, Bank of America is the second-largest bank in the country. (It was the biggest bank in the land – i.e., owned the most assets – until some recent economic troubles, which allowed J.P. Morgan Chase to push Bank of America out of its top spot).
So, when Bank of America is promoting short sales, it is a big red flag that banks are interested – more than ever before – in making deals with borrowers to get those houses sold, even if there is something left on the table after the buyer walks away – the “short” or “deficiency” amount left due on the mortgage.
Bank of America promotions include helping Realtors get their jobs done (like the seminar that is being held this month to help get buyers to the short sale closing table) and also include Bank of America’s short sale informational web pages on their web site:
Short Sales under the Home Affordable Foreclosure Alternatives (HAFA) Program (Short Sales under Making Home Affordable – The official program of the Departments of the Treasury & Housing and Urban Development)
Bank of America works with borrowers to determine qualification under the federal government’s HAFA program. Here, the bank’s approval process is easier and there is money for relocation costs and moving expenses – there are even funds available if the owner is acting as landlord, and is short selling a house where he has a tenant: HAFA will pay money to help the tenant move to a new place.
Preapproved Short Sale Program For Federal Housing Administration (FHA) Loans
For borrowers with a FHA mortgage, then Bank of America has a second program for FHA Short Sales. Here, like the other HAFA programs, borrowers must be suffering from financial hardship – plus they cannot get an FHA approved short sale unless they’ve already gone through some earlier hoops: unsuccessful tries at loan modification with Bank of America, for one thing. Here, the borrower who closes a FHA Short Sale not only bypasses a foreclosure judgment in an action brought by Bank of America, the borrower also gets a waiver of his deficiency. Bank of America has some FHA Short Sale information online here.
Preapproved Short Sale Program For Cooperative Short Sales
Here’s the help that Bank of America provides for borrowers who have mortgages not covered by FHA or HAFA umbrellas: these home owners have their mortgages secured by some other entity: usually, a private investor of some sort. These third parties aren’t offering nice big umbrellas like the federal government. Here, in what is being labeled a “Cooperative Short Sale,” the borrower can close a short sale with Bank of America if they were denied or not eligible for HAFA and they are under a financial hardship which bars them from making their mortgage payment. Notice this: there’s no waiver of a deficiency put on the table here by Bank of America, as there is with its other Short Sale Programs. Read more about the Cooperative Short Sale Program by Bank of America here.
Larry Tolchinsky’s Tip: At first glance, this looks great, doesn’t it? The big, BIG Bank of America – which holds a very, very large number of all Florida home mortgages – is setting up a division dedicated to short sales, holding seminars for realtors to help get buyers prepped and ready to buy, and providing all this nice, free, online information to sellers about how short sales work. There’s even a toll free number to call if you have questions.
Here’s the thing. Home owners are borrowers and banks are lenders. Banks sue home owners in lawsuits to foreclose on the homes when the mortgage defaults. Banks are the OPPOSING PARTY in the lawsuits, and it is important that borrowers understand this.
Bank of America is not your new best friend.
Bank of America wants to promote short sales because foreclosures are moving slow and they need to get those homes moving. The federal government is pushing to get the homes sold and things moving forward. (Read our post last week about recent changes in the federal programs regarding short sales.) It’s good for Bank of America – especially in Florida, where there is such a bottleneck of foreclosure actions – to promote short sales.
However, when it’s just the borrower chatting with the bank representative, the image that comes to mind for foreclosure defense attorneys is Little Red Riding Hood and the Wolf. Maybe that’s harsh – Bank of America would probably argue it is – but no single borrower setting with Bank of America can expect this bank to consider the borrower’s position, the borrower’s circumstances, the borrower’s DEFENSES.
Look carefully: do you find assistance on the Bank of America information pages on things like how to deal with appraisal fraud, or force-placed insurance or how a borrower might be helped by having their own legal counsel? No. It’s not there — because Bank of America isn’t doing this to help borrowers. It’s doing this to help Bank of America.
Short sales with Bank of America? Great. Short sales with Bank of America without your own lawyer to protect your interests? Maybe not so great. Think about it.
Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at firstname.lastname@example.org, or (954) 458-8655. If you have a specific situation, please call or email Larry because he can’t answer specific fact questions in general comments. He’s happy to take your call.