I attended a luncheon in San Diego, CA where Allen Seelenbinder VP REO Assets - West Region BofA and I wanted to share some insightful tips regarding Short Sales pertinant to BofA. BofA projects the influx of SS and it's prominence in our current market compared to REO's. For every 1 REO today, there are now 4 SS Listings. This was actually the reverse just a few years ago. I'm sure this is exciting news for all of us especially being partnered with SSSN.
These notes were scribbled on my yellow-pad so they are in random order since it was open discussion. Please remember that these tips pertain to BofA SS's only:
1) If a homeowner is 12+ months behind - it will be more difficult to get a postponement on a Trustee Sale.
2) When you get an approval letter with a closing date, that date is typically the date before a trustee sale is to be imposed. How you position your closing date in Equator can play a factor too. When uploading the an offer, Allen Seelenbinder suggests to put the closing date 90 days out (since we may not close in 45 days). This will alleviate any stress of trying to request for an extension when you get an approval with the closing date within 7 days. Keep mind whatever date you put on Equator can be adjusted any time and that you can definitely close sooner :)
3) Always pre-frame your seller and buyers upfront about contributing funds to close. It's typically the MIP company that wants the contribution. I'm sure we all know that telling our clients and even the buyers agents up-front helps us avoid people from "walking away" mid-submission/pending approval stage.
4) If there's MIP and you are conducting a HAFA SS, make sure the MIP company participates in HAFA or you won't have a deal.
5) *Important* Most valuations (BPO/Appraisals) are good for 90 days so an approved closing date is typically 1 day before Trustee Sale
6) If you don't agree with the value from the bank, request for a "VALUE RECONCILLIATION REQUEST" and support your value with real data and unique area information that may not otherwise be known to the bank. Apparently, it's usually the MIP companies you have to appeal to here.
7) If the loan has MI - don't be surprised if you're seller is asked for 25% of the deficiency amount - It's usually MIP Companies that are requesting this contribution in order for the short sale to close. *are you noticing a pattern about MI Companies -_-
8) If BofA is the Delegated Authority on the loan = 2 Weeks to get an approval after an agreed counter through Equator
9) Non-Delegated File and/or with MI = 30 days to get an approval through Equator.
10) 15% of experienced agents will close a Short Sale File faster and it's usually the direct result of being more educated than the next guy. Thank God for SSSN! :)
11) HELOC's are unsecured debt (like a credit card). Example: You get an approval letter from the 1st BofA and now your just waiting for the 2nd's approval. You call to check the status on the HELOC 2nd with "CITI" and the approval and they are saying it will or is on it's way to the charge off dept. *WELL THAT's JUST GREAT!*
Here's a cool tip .. Advise your seller to make a payment to reset the "Date of Last Activity". By doing this, it resets the time frames for the HELOC to go into a Collection. YAY! Now you can ask for a revised approval letter. And if you pre-framed your seller from the beginning, hopefully asking your seller to fork out some money will not be like pulling teeth.
12) If you are trying to appeal to the bottom line #'s for a Valuation/BPO that is unreasonable... always emphasize that by selling the property short, they will save 12%-15% rather than going REO. ALWAYS back it up with real data.
13) In California, the last thing homeowners usually pay is their HOA arrearages and BofA usually doesn't pay for it either. However, depending on some of the investors and if your tenacious enough, if you provide a copy of the demand letter from HOA, strip it down to the last 6 months of arrearages (meaning take out all the erroneous fees, attorneys fees, late fees, etc.,) and total that amount and submit that on the HUD, you may be able to get that paid for. The remaining amount could well be negotiated through contributions of buyer, seller or God-forbid .. your commissions.
I hope this helps everyone out. Remember to remain thick-skinned, tenacious and organized in all your short sale dealings .. afterall someones gotta do it! Happy Friday All!