San Jose Short Sale Agent: Silicon Valley Foreclosure Prevention Specialists

Starting today, December 1, 2011, Bank of America (BofA) makes the HAFA short sale process run easier and smoother by permitting them to be processed through the Equator system. The use of the Equator system made the entire short sale process at BofA go much smoother. It was only a couple of years ago, that BofA was often deemed to be the worst lender to deal with in the short sale arena. As the San Jose Short Sale Agent who has handled countless number of short sales with BoA prior to their transition to Equator, the changes in their service after converting to Equator were almost immediate. BofA went from the worst to best in a matter of months by a BBB (Better Business Bureau) survey. Unfortunately, the benefits and the efficiency of Equator were unavailable for those who were seeking HAFA short sales with BofA.

Until this announcement was made, all HAFA short sales had to be taken out of Equator and handled through their third party vendor call centers and fax machines. This meant things took longer and the inefficiencies of faxing documents to various fax numbers and non-employees came back into play. (But to be fair, even Wells Fargo which also uses Equator, takes the same approach with HAFA short sales and removes them from Equator). But with the announcement today that HAFA short sales can be processed through Equator, all is right with the universe. Now only if Wells Fargo will follow suit.

Bofa Announcement

Ask a San Jose Short Sale Agent like myself what the biggest potential headache in trying to get a short sale completed is, and I will bet the single most repeated response is the impatient buyer walking out in the middle of a transaction.   There is nothing as troublesome as working for weeks and months to convince a lender that the perfect buyer will close escrow and stop the foreclosure process, only to have that heroic buyer say they are moving on to another property or they are just tired of the waiting and want to take a break.

We listing agents try to overcome this havoc by having back-up buyers in place, however, the short sale apporval system was designed so that if the original buyer backs out, even if you had a back-up buyer in place, you would have to re-start the entire process.  Most of the time, you will be assigned to a different negotiator and the whole process which could have taken months, start over from zero.  And even if you had a willing back-up buyer who was extrememly excited, once they had been in back-up position for several weeks or months, they also lose interest or go out and buy something else.

The problem is the system, that triggers a “re-boot” if you will, when the buyer walked away.  The underlying hardship which caused the property to become distressed did not change; the verification of the financial condition did not change; the market condition did not change; the only thing that changed is the buyer and sometimes you can get the a buyer willing to pay the same amount.   So why have the whole process repeat? There is no rational purpose in starting from zero when a lot of the other procedures would have progressed.

Well, today Bank of America announced something which breaks from this ridiculous tradition and permits a back-up buyer to slide right in without having to start the whole process over.   Kudos to Bank of America. They are definitely going in the right direction and are living up to their declaration more than a year ago on their stance on short sales and whom they consider to be the clients in the process.  They are focusing on making the process go smoother, not just follow the trend.

As Bank of America is utilizing Equator to accomplish this, hopefully the other lenders and servicers who use the same system will follow suit and also do the rational thing.
BofA Announcement

Yes, sometimes it takes a few months, and the waiting is difficult; but when the end result is the perfect case scenario, everyone comes out happy.

In this particular case, the seller gets the short sale approved, but more importantly, she gets the approval plus the waiver of the deficiency claim and with no contribution in the form of cash or promissory note. The perfect scenario for the seller.   She gets to sell this place and start a new chapter of her life without the constant fear of the underwater mortgage and the fear of foreclosure and its impact on her future looming over her.   A young person gets another chance at her life.

Bank of America Approval

During the final quarter of 2010, there was quite a bit of news and commotion about the so called Robo Signer crisis. At one point, many lenders curtailed their foreclosure activities and some lenders stopped all foreclosure activities in all states, to insure compliance.    Well, the impact of that crisis seems to have abated and now foreclosure rates from lenders seem to be on the rise, according to the latest news.

Things are back to business as usual in the Foreclosure arena.

Bank of America was the biggest villian in the short sale world only  a year ago.   Anyone doing short sales in 2009 would tell you horror stories of how difficult the process was and long it took to get a Bank of America short sales approved.  From personal experience, I can tell you it was a long and unwelcome experience.   I dreaded dealing with the Loss Mitigation of Bank of America and that was a feeling shared by many San Jose Short Sale Specialists and experts.

Then in early part of 2010, with the announcement of HAFA by the Federal Government and its switch to the Equator system, Bank of America , made a dramatic change to change their image regarding short sales. There was a concerted effort to change their reputation and to be seen in a better light regarding short sales, apparently because their loan origination business was being impacted negatively by their horrible short sale reputation.

Within a few months of this announcement, their reputation had indeed changed for the better in a dramatic manner.  Their big push had indeed paid big dividends.

Fast forward  to 2011.   Kim Dawson, Senior Short Sale Executive at Bank of America, recently sat in on a CDPE webinar to talk about their successes in the short sale arena.   She didn’t have a lot of specific data, but pointed out some surprising numbers.

In January of 2007,  Bank of America had only closed 7 short sales throughout the nation.  At the end of 2010,  they had completed  93,000 short sales in the nation (see the graph below).   A huge and monumental accomplishment  by any measurement.   They were able to accomplish this because of the efficiency of the Equator System and by tripling their staffing in the loss mitigation department.

As of now, Bank of America, is  my favorite lender for working short sale.   In my opinion, they have completely succeeded in what they tried to accomplish is a very short time and should be commended on their efforts.

Litton Loan Servicing becomes the 5th National Loan Servicer to suspend their foreclosure activities in light of the Robo Signer scandal.  The scale of this scandal is increasing on a daily basis.  It will be interesting to see how this impacts California foreclosures.    Right now only Bank of America has announced it is suspending foreclosure activities in all 50 states.  The others have done so in those states which have judicial foreclosures.

As the Robo-Signer scandal continues, PNC has stalled foreclosure efforts in 23 states and Bank of America has stopped their foreclosure efforts in all 50 States until further notice.

Granted that California is a non-judicial foreclosure state, but the impact of these possible fraudulent actions on the part of these lenders is reverberating throughout the entire  industry and may have implications for non-judicial states as well.    Questions continue to rise as to the validity of these lender practices and how many homeowners may have been negatively affected.   An institution like Bank of America would not be stopping foreclosures in all 50 states, unless their own attorneys discovered something questionable about their practice.   More regulatory scrutiny certainly will follow.

This saga is getting more interesting every day.

This is now the Third National lender to halt its judicial foreclosure efforts in 23 states.

It obviously was common practice among these national lenders to have the “Robo-Signers” sign off on judicial foreclosure documents without having personal knowledge about each case, as it is required in judicial foreclosures.  With each of these banks voluntarily stalling their foreclosures efforts, the question as to the veracity of those homes that were already foreclosed on within the past three years must necessarily be challenged.  This could possibly means thousands, if not, tens of thousands of foreclosures, depending on how many lenders in those 23 States used these Robo-Signers.

Attorney Generals of several States are demanding a moratorium on foreclosures.

This story definitely will continue on as more players either come out voluntarily or are forced out.  Stay tuned.

But the larger implication

Here is an interesting article about how the BBB (Better Business Bureau) rated the major loan servicing companies which handle loan modification and short sales.  It’s was an interesting read for me because I was having a lot of difficulties recently with Chase, they have been ruthless and unreasonable in their demands, especially when they are in junior positions.  It used to be that Bank of America was the bank that everyone doing short sales bad mouthed; but my feeling was Chase was getting up there.

I was far from surprised to discover that Chase had received an “F”  from the consumers who were dealing with them.  The interesting fact is that Bank of America, which used to be at the bottom has now received an “A+”!  I can attest to this change  as well, because with the implementation of Equator into their short sale business and with their executive, Matt Vernon’s, committment to change the way they approached short sales,  their level or service and the speed with which they handle matters have changed  180 degrees.   They are one of the best to work with right now.

Another interesting point that the article tackles is the bait and switch loan mods that we are beginning to hear about.  Homeowners being strung out for months on these “temporary modifications” and while waiting (and paying) getting foreclosed on without notice.  At first, these instances sounded like anomalies, but the frequency of these instances is increasing; thereby indicating some sort of concerted effort rather than mere fluke incidents.

See what grade your loan servicer received.

http://www.shamethebanks.org/jorge/bbb-f-grades-to-chase-litton-ocwen

I was fortunate enough this morning to sit in and listen on a webinar set up by Bank of America.  It was their effort to explain how they would better handle short sales from here on out.   The webinar was hosted by Matt Vernon, executive in charge of REO and Short Sales, for Bank of America with over 10,000 Realtors listening in who specialize in short sales.   He was the man in charge.

It was interesting to hear that they are focusing on dramatically  improving their short sale process because they want to re-establish their relationship with Realtors to strengthen their ties with us on their mortgage origination front . Apparently, there has been a lot of negative repercussion on  their mortgage origination front during this important time, when buyers are trying to buy properties to take advantage of the Federal Tax Credit. He emphasized this point at the beginning of the presentation and again at the end of the presentation.

They have re-defined the customer in their view of the short sale process. It is no longer, solely the investor, but the new definition includes:

1. Distressed homeowner
2. Listing Agent
3.  Buyer’s Agent
4. Investor

This was the order he placed  the various interested parties.  (Hmmm.  I wonder if their participation in the HAFA Program had anything to do with this?)

Then he went into full detail explaining how they are utilizing Equator to process short sales and how successful it has been for them from in the past few months from their own measurements.   I can attest to this fact.

This presentation today obviously was to address the negative image that Bank of America is suffering right now from Realtors who specialize in Short Sales.  However,  it was very refreshing for this huge organization to come out and pro-actively admit they have a problem and lay out what they are going to do to do as an institution to address the problem.   But most importantly, in my opinion,  learning that they are doing this because they are suffering on their loan origination side as a result of this bad publicity.

Call me old fashioned, but I always try to get to the root cause of why people or institutions change their behavior.  In this case, apparently, it is because of the money they are losing on the origination front.  This makes it real and insures Bank of America will follow through and live up to its announcement.   After all, it is about them making more money.