Bank of America Streamlines Short Sales Process

Bank of America, widely recognized as the most uncooperative lender in short sale negotiations, has recently partnered with California-based Equator (REOTrans) to electronically process short sale transactions.

Bank of America is using the Equator short sale platform to streamline the short sale process through better communication, faster approvals, and quicker sales. Criticized for its lackluster performance under the government’s Making Home Affordable plan, Bank of America is implementing this platform to get more properties sold before they end up in foreclosure.

According to Equator CEO, Chris Saitta, this is the first electronic short sale process for a large national lender such as Bank of America. “Equator’s short sale module automates decision making, handles approvals, provides quick fulfillment, and complies with government programs”, Saitta said.

A short sale is the process where the owner of a distressed property works with the lender to sell the property before it goes into foreclosure. The term short sale was coined because the property is sold for less than the amount owed on the mortgage. The keys to a successful short sale are being accessible, being responsive, communicating, and then performing.

Lenders, such as Bank of America, recently have been leaning more toward short sales versus foreclosure sales because of the steep decline in the real estate market home prices. According to Equator, the number of successful short sales has increased exponentially across the country in the wake of the foreclosure crisis.

In the not so distant past, short sales were extremely difficult if not impossible with some lenders taking months to make a decision. As a result, the homeowner often ended up in foreclosure even though they had a viable offer on their home.

Bank of America has also reduced its strict short sale policy of requiring 10% of the second mortgage balance in a short sale. Now Bank of America will accept 5%. This is another indication that they are getting serious about selling homes before they are foreclosed.

In adopting this short sale platform, Bank of America, will be able to provide access 7 days a week, 24 hours a day to its borrowers. Borrowers can easily enter the necessary information and will receive real-time status updates. David Sunline, Bank of America’s Real Estate Management Executive, says “homeowners considering short sales should contact the bank within five days of getting an offer on the home and expect its cooperation as long as the offer is within the range of other sales in the area and the borrower can demonstrate financial hardship”.

The verdict is still out whether this platform will improve the short sale process through Bank of America, but it is a step in the right direction.