By avoiding foreclosure, the lenders get distressed properties back from delinquent borrowers more quickly, which helps them to avoid property tax payments, maintenance expenses and legal fees that can build up for months, even years, as foreclosures work through the system.
In addition, the incentives help guarantee the homes will return to the lenders in better condition. Foreclosed properties are often poorly maintained, even sometimes sabotaged, by angry former owners, making them worth far less to the banks. To qualify for Bank of America's relocation payments, borrowers must obtain pre-approval on sale prices for their homes. The sale must begin by the end of and close by September 26, The exact compensation is determined case-by-case based on a calculation that involves the home's value, mortgage balance and other factors.
Borrowers can call to find out if they may be eligible for the program. Print Comment. The listing of a short sale is initially quite similar to the listing of a traditional sale, however, your lender will require the following additional documentation; the previous two years tax returns for self employed borrowers these should include tax schedules , pay stubs for the previous 2 months, your previous 2 months bank statements for all accounts, borrower financial form a detailed list of all of your income, expenses, loans and bills , a hardship letter explaining why you are no longer able to afford the mortgage , and a third party authorization gives your lender permission to speak with your agent about your account.
Just as the you were required to apply and submit documents to obtain the loan, the bank is now going to require that you apply and submit proof that you can no longer afford the loan. The bank requires these documents and uses them to help better understand the borrowers financial situation, and to determine if the borrower should be granted a short sale based on their circumstances.
Again they are going to require a hardship letter with an an explanation of the circumstances including what happened to put you, the homeowner in the hardship that you are in, ultimately causing you not to be able to afford your payments. To qualify for a short sale Bank of America will want to see a clearly demonstrated financial hardship. Acceptable financial hardships include; relocation, loss of a job, payment increase or mortgage adjustment, business failure, reduced income, to much debt, illness or death, divorce, damage to property, incarceration, etc.
In any of the fore mentioned cases, BofA will typically agree to a short sale and will accept this as payment in full on the loan ie. Call us for additional details on acceptable hardships. If your payments are behind, then a lender may be more agreeable to negotiate with you. Thus the documents listed above will enable you in your efforts to successfully present a clear case to Bank of America that you are eligible and deserving of a short sale.
The points lost on your FICO score may be as follows:. Agents may also initiate the short sale for the homeowner by logging onto Equator but homeowners must still call to setup their personal login. Please call us to discuss your options. If you come to us with an offer without prior approval, we may be required to evaluate you for all programs, including a loan modification, before you can be eligible for a short sale.
If you're unable to sell your house through a short sale, your next option may be a deed in lieu of foreclosure. We can evaluate you for many programs to see if there are options that may help you stay in your home. If you do not qualify, you may be eligible for a short sale. In a traditional short sale, you advertise and show the house and receive an offer before you contact us. We recommend working with a real estate agent experienced in short sales who understands the process.
Once you have received the most competitive offer you can get and before we can consider it, we'll need a completed Second-Lien Release for any home equity loan, lines of credit or other debts against the property.
We can't move forward until we receive this document. If you have a Bank of America home equity loan or line of credit, we'll take care of getting approvals for your short sale. If your loan or line of credit is with another lender, contact that lender and request a Second-Lien Release. The lender needs to provide this document and send it to you. If you're eligible, you may be able to start the short sale process right away.
However, in most cases, it is required we evaluate whether you are eligible for a loan modification or other home retention options first. Here's what you'll need when you call: Loan and property information Information on any foreclosure notices or dates you've received Details of the offer and a copy of the signed purchase contract Information on any home equity loan or line of credit on the property, if applicable Information on a loan modification, if you were considered for one Details about your financial hardship.
You'll be paired with a Customer Relationship Manager who will work with you throughout the process. When you call, we may verify that there are no other options available that would allow you to keep the property. If we authorize you to start the short sale process, you can expect to hear back from us about your offer in approximately 90 calendar days after your real estate agent has submitted the offer and all documents to us. Please contact your Customer Relationship Manager at any point for an update or with any questions about the process.
During that time, we'll arrange an appraisal of your house at no cost to you to determine its current fair market value.
Once that's determined, we may make a counteroffer. It's not unusual for potential buyers to withdraw offers all the way up until the closing, so during this time, we encourage you to keep the house up for sale.
When all necessary parties have accepted the offer, we'll provide you with an approval letter releasing the house for purchase. When the offer is accepted, final documents will be prepared and a closing deadline will be provided in the approval letter.
Once the sale is finalized, your mortgage and any other loans against the house are settled from the proceeds of the sale. Depending on who owns the loan, if the funds from your traditional short sale don't cover the amount owed on your loan, you may be responsible for paying the difference also known as the deficiency. If we forgive any amount of mortgage debt, there may be possible tax consequences. Please consult a tax advisor for more information about how this could affect you.
We'll report the sale to the major credit reporting agencies as completed for less than the amount owed. We strive to provide you with information about products and services you might find interesting and useful.
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