Bank of America Refines Short Sale Process

The Distressed Property Institute recently hosted a webinar with Mr. Bob Hora, Senior Vice President of Bank of America, to discuss recent updates to BofA’s short sale process.

Mr. Hora asserted that Bank of America is committed to doing short sales and rejected the myth that banks have incentive to foreclose, saying that the bank doesn’t want more repossessed property on their books. Some interesting figures: Bank of America closed 42,000 short sales in 2009, 90k in 2010, will close more than 100k in 2011, and they plan to do even more in 2012.

Short sales have a reputation for taking a long time and BofA’s goal is to shorten the process. They’ve been hiring more people and have gone from 200-250 short sale employees a couple years ago to now having 3,000 employees working just on short sales!

Bank of America is sending out targeted solicitations to homeowners who are at risk of foreclosure. This includes a transition guide that goes over options to avoid foreclosure, deed-in-lieu (DIL) of foreclosure, why you should consider a short sale, HAFA, avoiding scams, etc.

Mr. Hora went over some of the reasons that keep BofA short sales from closing, such as improper documentation, valuation issues, unallowable fees, etc. Also outlined were the specific procedures to escalate a problematic BofA short sale. It is Bank of America’s belief that a “trained agent…makes a big difference.”

He reiterated that agents should be expanding their short sale knowledge, should know their marketplace, and should set appropriate expectations with everyone involved. Short sales aren’t going away anytime soon and they’re usually a worthwhile alternative for homeowners facing foreclosure.

In Flagstaff, the number of short sales and foreclosures have been holding steady, but with improved processes and agent training on short sales, perhaps we’ll be able to put a dent in the number of foreclosures.