RSS Blog FeedBank Of America Offers Streamlining of Short Sales
Posted at 7:04 AM, Sep. 21, 2009
Bank of America committed to streamlining short sale process
Mon 1 Jun 2009
Bank of America has seen a dramatic increase in the demand for short sales over the past two years as a result of stressed economic conditions and falling housing values. Struggling homeowners are unable to sell their properties for a profit or even for what they owe and are increasingly looking at short sales as a viable option to avoid foreclosure.
“In the face of high volumes,” said Foreclosure & Real Estate Management Senior Vice President David Sunlin, “we have taken several steps to increase the efficiency of the short sale process, including increasing staffing, updating training and creating a dedicated short sale call center.”
A short sale, also called a short payoff, is a situation where the lender agrees to release the lien of the property for an amount that is less than what is owed. Typically short sales have always been a lengthy and complex process as the lenders, investors and mortgage insurers must all agree on a sales price. Today, the average short sale is taking about 50 days which is in line with other servicers. However it can take up to 90 days or more if investor approval is necessary.
Bank of America’s Foreclosure & Real Estate Management (FREM) division has been working diligently over the past year to streamline the short sale process for our borrowers. In the next 60 to 90 days, FREM will have a new internet portal that will provide real-time information for the real estate agent by finding and tracking the short sales of houses with mortgages we service. The Web portal will also accept documentation to help expedite the short sale process.
Still in the early stages is a pilot program where FREM proactively advises potential sellers and their agents that a reserve value/amount has been set. This will help ensure necessary approvals are gathered quickly in order to increase response times.
FREM is currently finalizing the Cooperative Short Sale concept to help decrease our fallout rate of 60% to 70% where short sale offers are approved but fallout prior to closing. Traditionally, the short sale process does not formally begin until a formal offer is received. Under the cooperative program, FREM will obtain information and establish current market value prior to receiving an offer. This will help decrease the time borrowers have to wait for approval and will help FREM more quickly determine legitimate offers.
“We have taken steps to keep up with demand and maintain processing and approval times as close to traditional timeframes as possible,” said Sunlin. “We are excited about the early results of our pilot program and the promise of our new cooperative short sale program to provide considerable time-savings and an improved customer experience.”
Another new initiative is the recently announced addition to the administration’s Making Home Affordable program where monetary incentives will be provided to servicers and help to cover relocation expenses for homeowners. Final guidelines have not been announced but Sunlin is “confident that it will be compatible with what Bank of America is doing and planning to implement.”
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