Oh no it is the Bank of America Deficiency Tool!
I have been trying to do a BOA short sale for over a year. We are now on our 3rd buyer. The foreclosure auction is set for October for my seller's property which was purchased as a 2nd home. This last time BOA asked for $5,000 from the seller and we responded that the seller would borrow the money to bring to closing if BOA would give us a letter stating they would release the lien and not come after the sellers for the deficiency.
Well now we just got our approval letter and it is the standard deficiency letter saying they reserve the right to come after them later. I contacted the closer and he responded with this statement in his email: "The deficiency tool was run to see if we could remove the deficiency language of the approval letter. The loan didn't qualify to have removed. Please verify if the seller wants to move on with the short sale. Thank you. "
My first question is . . . what the hell is he talking about? My second question is why would my sellers want to pay them $5,000 if they are going to come after them for the deficiency later anyway? My third question is what do we do now?
Replies to This Discussion
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Permalink Reply by Bryant Tutas on
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Hi Karen. Here is an article that was written about the "deficiency tool" that may help.
http://shortsalebasics.ning.com/profiles/blogs/contd-boa-short-sale... -
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Permalink Reply by Karen Mathers on
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I just realized the closer sent me a working copy of the "Deficiency Tool". It is an Excel file and it works!
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Permalink Reply by Anna Mackey SDHS on
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Wow Karen! do you mind sharing that file? my email is [email protected] and i would be thrilled if you could send it to me :o)
This could be really helpful in evaluating new files and setting up seller's expectations!
Karen Mathers said:I just realized the closer sent me a working copy of the "Deficiency Tool". It is an Excel file and it works! -
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Bank of America Deficiency Evaluation Tool
I did not realize I could upload the deficiency Evaluation Tool with this post. As I said before, it is an Excel file. I did not know I had it at first as my computer would not let me open it because it has “macros” in it. I had to enable macros on my computer and then it worked fine. As for the Deficiency Tool, we don’t know if the investor is delegated or non-delegated so we may not be able to come up with the answer ourselves, but it does help to understand how they get their decision. Maybe we can ask the negotiator if the investor is delegated? If you need any help, let me know. Karen - Attachments:
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Bank of America DET.xls, 180 KB
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Permalink Reply by Wendy Cutrufelli on
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Similar situation......My seller has a non-recourse, purchase money 1st mortgage. No second lien. B of A required a $5,000 promissory note and then issued an approval letter with the standard deficiency language. I called the negotiator to remind him that the mortgage is non-recourse and the deficiency language needs to be removed. The seller will not agree to short-sale terms that leaves him liable for $180k deficiency when he won't incur the deficiency in foreclosure. The negotiator says he can't do anything about the "standard language in the approval letter." Can it possibly be true that no one in B of A can authorize the issuance of an approval letter without the recourse language on a non-recourse loan?
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Permalink Reply by carol pefley on
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I have had this happen to me several times and have been able to have the deficiency language removed every time. Email : [email protected] . explain to him what is going tell him that the seller will let the seller will allow the house to foreclose if the letter isnt changed.
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Thank you Carol fro sharing! Who is this David Hernandez? Do you know what his position is at BofA?
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He is a teram leader and has helped me in a few short sales when the negotiator, closer and other people involved would not listen to reason. he has taken over some of my fiels when i had problems with the negotiator asking for promisarry notes etc. and has always been able to get done whagt needs to be done in order to close the deal. but different states have different laws so it may depend on what state you are in . I am in california which is a non deficiency state.
Anna Mackey SDHS said:Thank you Carol fro sharing! Who is this David Hernandez? Do you know what his position is at BofA? -
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Permalink Reply by Gwen Mark on
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I am in AZ and we are anti deficiency state if it forecloses. It is grey area for short sales. I just answered the questions on the evaluation and it came up deficiency. I then went in and answered differently and it still came up deficiency..hmmmmm do you suppose it is rigged that way????
I had B of A remove the language on a 2nd, just recently, but just asked for it to be removed on a 1st, one loan and they are saying they can't??? I will NOT recommend my client to be liable for this when she won't be if it forecloses! -
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Permalink Reply by Mike Sher on
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I am from Michigan which is a full recourse state and have had a devil of a time getting BOA to agree to deficiency releasing language on a 1st or 2nd loan. I wonder that because AZ and CA are none recourse and/or anti-deficiency states that BOA will allow the release language in those states since they are aware that in a Foreclosure, the bank would get nothing. While here in MI, the bank would be able to collect the difference between what the Sheriff sale price was and the remainder of the note. Plus the 2nd lien holder would have full deficiency rights.\\
Can anyone reading this from a recourse state, comment on the ability of getting BOA to release the deficiency rights? -
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Permalink Reply by Jeff Payne on
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We have gotten this language removed many times but never has BofA stated that they would NOT pursue a deficiency, they just removed the language after we asked them to remove it.
I would take my chances that they are NOT coming after a deficiency and get the deal closed if I were the seller, it is always better than a foreclosure in my opinion. I have yet to hear of Bank of America pursuing a deficiency after a short sale, at least none of my sellers have been pursued, yet. It is my opinion that there are just way too many short sales for BofA to spend the money to initiate a lawsuit to pursue a deficiency that they most likely will never recover. just my opinion :) -
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Permalink Reply by Victoria Frieberg on
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hi, also would like the deficiency tool, thanks for sharing! [email protected]
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