Learn how to get your ASC/Bank of America short sale approved in this ASC/Bank of America Short Sale Case Study.
ASC/Bank of America Short Sale Case Study:
Property Location: Kirkland, WA - King County
1st Lender: ASC
2nd Lender: Bank of America
Hardship:
“Due to the financial and economical crisis in 2007 in my line of work as an electrical sub-contractor, I have had great losses, and therefore was not able to sustain my previous income. Due to this disadvantage, I have been in great financial difficulty and unable to keep up with my payments.
“This crisis has been further increased by a health crisis of my wife and subsequent complications. Also my daughter had to have surgery which further created a hardship on me.
“Therefore, I would sincerely appreciate it if you would consider this short sale.”
Sales Price: $200,000
1st Loan Balance: $338,026
1st Loan Arrears: $26,867
1st Deficiency Balance: $189,687
1st Settlement: Deficiency waived!
2nd Loan Balance: $80,731
2nd Loan Arrears: $6,115
2nd Deficiency Balance: $78,846
2nd Settlement: Deficiency waived!
Timeline:
On April 13, 2011, a signed offer to purchase the home for $200,000 was received. The Listing Agent passed the file to a Seattle Short Sales, Inc., case manager on May 13.
On May 15, the Seattle Short Sales, Inc., case manager requested documents including financial and tax documents, hardship letter, and title report from the Listing Agent. Some of these documents were provided on June 7 but with errors, and on June 9 the case manager requested the corrected documents. The corrected documents were provided by the Listing Agent on June 13 and June 20. On June 21 the Seattle Short Sales, Inc., case manager submitted the completed short sales package to the first lender (ASC), with a request that the short sale proceed as a HAFA transaction, and initiated the case online with the second lender (Bank of America).
On June 30, ASC indicated that the file was complete and under review for HAFA qualification. On July 5, a negotiator was assigned by BofA, and on July 12, the ASC indicated that the request to process the sale through HAFA was denied, but that the file would proceed as a traditional short sale and no foreclosure sale was scheduled.
On July 18, the BofA negotiator requested additional financial documents, which the Seattle Short Sales, Inc., case manager provided on July 21. On July 26, ASC assigned a negotiator to the case. On August 9 they indicated that a different negotiator was to be assigned.
On August 10, ASC requested additional financial documents as well as some missing documents from the seller, and the Seattle Short Sales, Inc., case manager passed that request on to the Listing Agent that same day. On August 23, the seller provided some of the requested documents, but they were incomplete.
On September 1, Bof A as second lender countered the the settlement offer. The Seattle Short Sales, Inc., case manager requested an update from the first lender before responding to it. On September 9, ASC confirmed that the case was still moving forward and that no foreclosure sale was scheduled, and they were reviewing the file. On September 16, BofA requested additional financial documents, which the Seattle Short Sales, Inc., case manager uploaded that same day.
On September 16, ASC assigned a new processor to the case. On September 22, they requested additional updated financial documents, which were provided. On September 26, ASC provided a counter offer, accepting the $200,000 sales price but removing some of the closing costs and lowering commissions to 5%. On September 29, the Seattle Short Sales, Inc., case manager countered back, with commissions at 5.5%, retaining some of the closing costs, and extending the closing date to November 17.
On October 4, ASC countered back, accepting terms except for the commission, which they kept at 5%, saying that that was a requirement of the investor. The offer was countered back and forth twice more, and on November 2 ASC issued an approval letter for the short sale, waiving the deficiency balance.
Meanwhile, on October 20, BofA had assigned a new negotiator to the file and requested that the documents be uploaded again. The requested documents were uploaded, and on November 7 the Seattle Short Sales, Inc., case manager contacted the new negotiator about reviewing the uploaded documents. On November 21, the case manager contacted BofA again, requesting that they expedite the approval. The BofA negotiator indicated that they were still awaiting results of the appraisal.
On November 29, the Seattle Short Sales, Inc., case manager contacted BofA with an urgent request, explaining that they had been working on the file for two months, and that the first approval would expire in 17 days. BofA escalated the file to a specialist who would review the offer in the next 48 hours.
On December 12, BofA provided a counter offer, which the Seattle Short Sales, Inc., case manager accepted. On December 16, BofA issued an approval letter for the short sale. The Seattle Short Sales, Inc., case manager immediately contacted the first lender with a request to extend their approval. The approval was extended to close by December 30.
Result:
The seller was able to sell the home that he could no longer afford. He paid less than half of the balance owing on the first mortgage - a discount of $189,687 - and less than 10% of the balance owing on his second mortgage - a discount of $78,846.
The total discount he received on his mortgage payments was over $268,000 - and he was waived of ever having to pay back those deficiency balances!
To download a copy of the 1st short sale approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=96150
To download a copy of the 2nd short sale approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=97488
If you are a homeowner, and would like to learn more about short selling your home, please go to: http://seattleshortsales.com/homeowners/
If you are a real estate agent, and would like to learn about our no-fee short sale service, please go to: http://seattleshortsales.com/agents/
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