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.
I'd like to add that it's likely that by the end of 2012, homeowner lawsuits against lenders / investors for improper foreclosure will have gained some traction. In our area, there are a few companies popping up that will help the homeowner fight the banks, and in Florida it's really gaining steam. The homeowner stays in the house during the process (which can take 1-2 YEARS) with the hopeful outcome of a judge eliminating the mortgage obligation since the lender can't provide PROOF that they had the legal right to foreclose. The Chairman of the FDIC even warned the lenders on the '60 Minutes' piece a few weeks ago of the very real possibility of thousands of homeowners winning these cases. The expiration of the MDRA may position the IRS as the lender "new friend", but let's hope the homeowners win a few of these bank challenges to keep them in check. Faced with foreclosing and possibly losing all rights to the property vs. agreeing to a short sale could move things in our favor.
And the BPO "crisis" surely doesn't need Zillow to make things worse. .....'nuf said.
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.
NARRPR does not apply here.
The BofA site says a home I have listed is worth $111,000 (with range = $99,000 to $123,000).
We recently lost a short sale at $119,000 because of a BPO at $137,500.
Maybe, I could become a believer.
Janice MacMillan said:
This is very similiar to the www.NARRPR.com website
Jeff Payne said: