Just spoke with a Bank of America negotiator today who's in Delaware. She says many changes are coming, one of them, no more BPOs or appraisals....they are moving into using AVA or AVM (like Zillow).  Can you imagine how that will screw things up>  no actual human being looking at our listings...?

 

Also, have you noticed on Equator you can't just upload docs to the library, you now have to speak with the negotiator and spew lots of info including monthly expenses in order to "qualify" for the appraisal...

 

B of A used to be the easiest approval letter to get for me...geting a little worried here.

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We have been dealing with Equator issues all week where loads of our approved short sale files are  now in "Unavailable" status and assigned to "[email protected],com, no reasonable explanations just excuses, lack of communication from management and lots of frustrated clients - this is now starting to make sense.  They are making system changes and this is screwing everything up.
They have been making system changes since the first weekend of April and I have to believe they are doing this on purpose. Becuase any real programmer will know that you can do updates without losing all the documents or killing everything in process unless you want to and when congress comes calliing you can blame IT for all the short sales going south and into foreclosure. This also delays write downs so the executives can still take big bonsus.
Interesting comments!  I have also noticed I have "generic" negotiators now and lost docs.  Also, after I had initiated on Equator,a few clients had their BofA 2nd's transferred to Green Tree Servicing only to get a letter a few weeks later saying the file would be transferred back to BofA.  The sellers were notified of the change, but I wasn't. What do you guys think is REALLY going on here?

Just to provide some BPO info ......  I did more BPOs in March than any other month in the last 5 years.  However, in April, I got only ONE assignment and that was left over from March.  The BPO companies are telling me they have no assignments from the banks to give out.

 

As for BofA, everything has pretty much come to a halt this week.  I have heard that beginning tomorrow 5/1, BofA will be forcing Loan Mods and stopping almost all Short Sales.

 

Thom Colby

Broker

Newport Beach CA

 

Well this makes sense because now when you call in to setup the short sale they ask the seller if they want to go into HAFA and if the answer is no they ask would them have you ever considered a loan modification. This just start about 2 weeks ago. They will force more foreclosures if they do this.

Harry, as usual - "well put" - I'll add one comment - that is, when people can no longer get Debt Relief, realize the loan mod is simply a reduction in payment and spread over a new 40 year term, the only avenue left is Bankruptcy.  I think we currently see lots of people filing, but as the next 19 months evaporate, we will see many more people filing BK.

Harry Clay said:

Put two & two together:

The Mortgage Debt Relief Act is due to sunset in Dec 2012...19 short months from now. Whether it will be extended is anybody's guess.

Right now, the MDRA is essentially the upside down homeowner's Get Out of Jail Free Card. The banks hate it.

With the MDRA, the IRS is forgiving the taxes on the unearned income on a shortfall, whether foreclosure or short sale.

The MDRA makes the strategy of a short sale worthwhile to the seller, especially in non deficiency judgement states like CA.

If banks suddenly start becoming more "cooperative" on modifications after all this time of dodging them...it doesn't change the fact that the property is still hopelessly upside down, unless they're going to start talking principal reductions.

Temporary reduced payments on a mod will solely extend the float period UNTIL the MDRA sunsets.

And THEN if that still updside down homeowner defaults after 2012...BOOM.

The IRS will go from being the short sale seller's "friend" to being the lenders' "ally"...because now the seller will be faced with the double whammy of both losing the property to the bank and owing taxes to the IRS on the loss.

Once unearned income becomes taxable again (like it was previously for so many years)...I don't think we will see nearly as many people want to discuss a short sale, & those facing foreclosure are going to have to try to hold on even harder, as well.

Offering a last minute mod to a seller who was ready to go with a short sale is just the lender's way of waving candy in the face of desperate upside down sellers, with the intention to stall them out until their Get Out of Jail Free card expires.

You can't force a loan Mod if they don't have jobs...the real reason short sales exisit.

Thom Colby said:

Just to provide some BPO info ......  I did more BPOs in March than any other month in the last 5 years.  However, in April, I got only ONE assignment and that was left over from March.  The BPO companies are telling me they have no assignments from the banks to give out.

 

As for BofA, everything has pretty much come to a halt this week.  I have heard that beginning tomorrow 5/1, BofA will be forcing Loan Mods and stopping almost all Short Sales.

 

Thom Colby

Broker

Newport Beach CA

That doesn't sound good at all.  I have a property that has had exterior BPO's only and the values keep coming in too high.  If someone would just walk in the door they would drop the value like a brick.  Also, Zillow seems to always be wrong on their values. 
If they answer no to Hafa and request a traditional short sale, they will grant it.  They can tell the customer immeduately if they qualify for a MOD with income.  If they have no income due to job loss it is not a problem.

Tim W said:

 

Well this makes sense because now when you call in to setup the short sale they ask the seller if they want to go into HAFA and if the answer is no they ask would them have you ever considered a loan modification. This just start about 2 weeks ago. They will force more foreclosures if they do this.

Gonna See Matt Vernon with BOA in June,  I am going to be sure to ask him what is going on.  He doesnt seem to be the type to want to screw this up as he just made so many changes there for the better...

 

there are always changes coming we just need to learn to adapt to them.  And if we get rid of MDRA after 2012 you better have a good bk attorney on your hands that will be the sellers new best friend...

 

Just had the same thing on one BOA was 1st and 2nd ,then at approval get told Green Tree is on the 2nd,after the 1st had already said they would only pay the 2nd 2409.00  now anytime I've had a Green Tree 2nd they want 5% of the sale price,which would be 4300.00.  To top if off we had just got a extend on the sale date ,and would have been able to close in time ,now starting from the beginning with Green Tree will take more time ,most likey no more extend ,so after everything they will FC anyway????

Wendy Martin said:
Interesting comments!  I have also noticed I have "generic" negotiators now and lost docs.  Also, after I had initiated on Equator,a few clients had their BofA 2nd's transferred to Green Tree Servicing only to get a letter a few weeks later saying the file would be transferred back to BofA.  The sellers were notified of the change, but I wasn't. What do you guys think is REALLY going on here?
The only problem with BK, Thom, is that tax liability is NOT dischargable in either a chapter 7 or chapter 13.  The filer still has to pay any tax owed.  

Thom Colby said:

Harry, as usual - "well put" - I'll add one comment - that is, when people can no longer get Debt Relief, realize the loan mod is simply a reduction in payment and spread over a new 40 year term, the only avenue left is Bankruptcy.  I think we currently see lots of people filing, but as the next 19 months evaporate, we will see many more people filing BK.

Harry Clay said:

Put two & two together:

The Mortgage Debt Relief Act is due to sunset in Dec 2012...19 short months from now. Whether it will be extended is anybody's guess.

Right now, the MDRA is essentially the upside down homeowner's Get Out of Jail Free Card. The banks hate it.

With the MDRA, the IRS is forgiving the taxes on the unearned income on a shortfall, whether foreclosure or short sale.

The MDRA makes the strategy of a short sale worthwhile to the seller, especially in non deficiency judgement states like CA.

If banks suddenly start becoming more "cooperative" on modifications after all this time of dodging them...it doesn't change the fact that the property is still hopelessly upside down, unless they're going to start talking principal reductions.

Temporary reduced payments on a mod will solely extend the float period UNTIL the MDRA sunsets.

And THEN if that still updside down homeowner defaults after 2012...BOOM.

The IRS will go from being the short sale seller's "friend" to being the lenders' "ally"...because now the seller will be faced with the double whammy of both losing the property to the bank and owing taxes to the IRS on the loss.

Once unearned income becomes taxable again (like it was previously for so many years)...I don't think we will see nearly as many people want to discuss a short sale, & those facing foreclosure are going to have to try to hold on even harder, as well.

Offering a last minute mod to a seller who was ready to go with a short sale is just the lender's way of waving candy in the face of desperate upside down sellers, with the intention to stall them out until their Get Out of Jail Free card expires.

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