Bank Of America-Short Sale Changes

Bank of America rolled out their new short sale changes on Friday the 13th!  These changes address conventional loans that are processed by Bank of America through an internet-based platform call the Equator System and are intended to streamline the short sale process.  Bank of American wants to be efficient enough to achieve short sale approvals in less than one month!  While this is exciting news for any listing or buying agent, be aware that in order for the lender to meet these impressive timelines, they will have to impose the same timelines on the agent and the seller.  With cooperation between all parties, this can be achieved, so the more you know and understand about the new requirements, the better you can be at getting your short sale listings closed!

Bank of America now requires the use of their standard forms in order to make streamlining the process easier.  The most important form is their new Third Party Authorization form that they announced last March.  This is a two part form.  Part one requires the seller to designate the persons they authorization to speak on their behalf through the short sale process.  One of these parties must be their licensed real estate agent.  Part two must be completed by the agent and include their licensing information.

While FHA and VA loans are still being initiated via fax direct to the lender, all conventional loans must be processed through the Equator system.  If you are initiating a short sale that has an offer, Bank of America now requires the following documents to initiate the short sale:

1.             Bank of America’s new Third Party Authorization Form, with both sections completely filled out.

2.             The fully executed purchase contract

3.             Bank of America’s new Buyer’s Acknowledgment and Disclosure, which states the buying parties have no relation to Bank of America, its employees, officers or directors.

3.             Estimated HUD-1 Settlement Statement.

4.             The IRS Form 4506-T, completely filled out, signed and dated.

5.             Bank of America’s specific Short Sale Addendum

Additionally, Bank of America no longer allows ‘For Sale by Owner (FSBO)’ short sale transactions.  If you are initiating a short sale with Bank of America, whether in the Equator System or traditionally by fax with an FHA or VA loan, the seller must be represented by a licensed real estate agent.

Bank of America also tightened up their privacy standards by requiring all correspondence and messages to be initiated and responded to via the Equator system.  No emails from personal email accounts will be accepted.  This protects the homeowner’s privacy by preventing any transmission of the homeowner’s confidential information and it keeps all communication and correspondence in the same place.

Another positive change Bank of America made is to allow the submission of a new purchase contract if a buyer walks without having to start the short sale process over again.  The downside of this is the listing agent only has five days to submit a new offer before the short sale is cancelled out of the Equator system.

The protocol for getting a status update or help with an issue that is delaying the short sale process is to contact the short sale specialist assigned to the short sale.  If you aren’t getting a response, the next step is to contact the short sale team lead.  Again, all correspondence must go through the Equator System.  If you have an urgent need, such as postponing a foreclosure date, you should contact customer care at 866-880-1232.

Stay tuned for more short sale changes.