Learn how to get your Bank of America short sale approved in this Bank of America Short Sale Case Study.
Bank of America Short Sale Case Study:
Property Location: Everett, WA - Snohomish County
1st Lender: Bank of America
Hardship:
“The reason of this letter is to explain why I couldn’t keep up with the payments on my house. Where I work, they had to reduce my hours and all employees’ hourly wages. I’m making less money that I was making originally, and bills began to go up.
“As my kids began to grow up, the demands began to get higher needs of of food, clothing, school supplies and other necessities. An everything started to come down on us. I tried my hardest to keep up with the payments. Due to the fact I felt forced, I applied for credit cards to pay off the monthly payments on the home, and that did not help the situation.
“Now I’m at the brink of where I have reached so many debts where I can barely keep up with any payments. And that is why I need to sell the house.”
1st Loan Balance: $228,500
Sales Price: $124,000
Approved Commissions: 6%
1st Loan Approved Net Proceeds: $105,257
1st Deficiency Balance: $123,243
1st Settlement: Deficiency waived!
Timeline:
A signed offer to purchase the property for $124,000 was received on March 31, 2011. The Listing Agent forwarded the file to the Seattle Short Sales, Inc., case manager on April 4th, 2011. The necessary financial and legal documents were assembled, and the completed short sale package was submitted to the lender on April 19 along with an application to process the sale through HAFA.
The lender responded the following day with a request for additional financial documents in order to consider the HAFA application. The Seattle Short Sales, Inc., case manager immediately uploaded the documents that she had available, and requested the outstanding ones from the Listing Agent.
On April 29, Seattle Short Sales, Inc., received the Validation BPO (Broker’s Price Opinion) that had been requested. On May 16, the lender indicated that all required documents had been uploaded and that the file was currently in underwriting, which would take about two weeks to complete. On May 20, the file was approved to proceed through HAFA. On June 9, still not having heard anything from the lender’s negotiator, the Seattle Short Sales, Inc., case manager requested that the file be escalated.
On June 22, the lender presented a counter-offer of $130,000 purchase price, with no closing costs, but allowing the HAFA credit of $3,000 to the seller. The following day, the buyer agreed to come up to $127,000, which was the limit that their loan officer would approve. The Seattle Short Sales, Inc., case manager submitted this counter to the lender, working to get the 3% closing costs approved by the lender.
On July 11, the Seattle Short Sales, Inc., case manager contacted the lender for an update on the offer. The following day, the lender responded that they would probably have an approval within 3 days. On July 18, the Seattle Short Sales, Inc., case manager contacted the lender again requesting an update. On July 21, the case manager requested again for an update, to find out that a new negotiator had been assigned to the file. The new negotiator requested updated financial documents, and also indicated that the investor requested proof of funds available for the down payment.
The Seattle Short Sales, Inc., case manager revised and submitted documents for the entire file, reflecting a new extended closing date for the sale and a new HAFA application with that new closing date. On July 26, the case manager asked the negotiator to confirm receipt of all of the revised documents. The negotiator did, and also confirmed that the file had been submitted to the investor for final approval. and that an approval letter would probably be issued within two weeks.
On August 1, the lender requested additional financial documents, which the Seattle Short Sales, Inc., case manager provided. On August 5, the lender issued approval for the short sale to proceed through HAFA, and allowing the closing costs.
However, on September 14, the buyer indicated that their lender had undertaken an appraisal of the home, which came in at $122,000, and requested that the approved purchase price be lowered from $127,000 to $124,000. The Seattle Short Sales, Inc., case manager submitted this request, and the supporting documents, to the lender. On September 22, the case manager contacted the lender for an update.
On September 30, the lender issued a revised approval letter, dropping the sales price to $124,000, and dropping their approved minimum net proceeds from $107,934 to $105,257.
Result:
The homeowner was able to sell the house that he could no longer afford, paying off less than half of what he owed on the loan. Since the sale was processed through HAFA, he was waived of having to ever pay back the $123,000 deficiency, and he also received a relocation credit of $3,000. He avoided foreclosure, and walked away with no debts remaining from his home.
To download a copy of the short sale approval letter, click here: http://seattleshortsales.com/LiteratureRetrieve.aspx?ID=90734
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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