Bank of America Short Sale - Not Delinquent on Payments

I have a client that I'm working with in which he has not missed any payments on his B of A loan.  We actually had someone come to our office from B of A and one of the questions was whether the borrower had to be delinquent to successfully initiate and close on a short sale and the answer was that they could be current and still accomplish short sale approval.  Has anyone actually seen this through with B of A?  I know in the past you had to be behind to even get their attention.

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Permalink Reply by Jeff Payne on October 18, 2011 at 2:21am

It has never been a BofA policy that a seller has to be delinquent to do a short sale, that was a bit of an urban legend.  It all depends on the investor.  I have done several with the home owner current on payments.  hardship is the key.

Permalink Reply by Keith Kyle on October 18, 2011 at 4:38am

Thanks Jeff.  I had been told that it wasn't a factor and as you mentioned, hardship is the key, but not surprisingly the issue has never come up as all of my short sales involved pretty serious delinquencies.

Permalink Reply by Michael Hayley on October 19, 2011 at 7:12am

I've had two cases where the owner was told to become delinquent then ask for the short sale again. Although, I'm not sure if it was BOA; it was in 2009. 

Permalink Reply by Jim Beardsley on October 19, 2011 at 8:35am

Just today, BoA called my seller (just listed the home today & we're going to be shooting for a short sale) and asked him why he hasn't made this months payment, due Oct 1st & now it's 4 days beyond the grace period.  My seller told them they would hearing from me & he's looking to do a SS.  They continued to press him for the October pym't but at the same time told him they would not even look at a short sale for him until he missed pym'ts.  Up is down & down is up!!!!

Permalink Reply by Jeff Payne on October 19, 2011 at 8:59am

Jim, the people that are calling your seller are probably debt collectors who will lie and cheat and use intimidation tactics to get a seller to make a payment.  They have no idea about loss mitigation so don't believe a word they say.  I have and still do plenty of Bank of America short sales with the homeowner current.  Alot of times it depends on the investor on the loan.

Permalink Reply by Kimberley Kelly on October 20, 2011 at 2:41am

Great answers Jeff..especially about the people calling the Sellers!  I have had ZERO luck in getting B of A to approve Short Sales without delinquencies, but I do read about it all the time, so it must be true and NOT an urban myth!

Permalink Reply by Jeff Payne on October 20, 2011 at 2:44am

Thanks Kim, many times it depends on the investors and/or the impending hardship.  I just got a Wells Fargo ss approved and the seller offers to pay $105,000 and Wells only asked for $6000.00. Go figure :)  They probably come out ahead with an insurance claim and tax deduction?

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