In processing Bank Of America short sales where borrowers have FHA loans we have seen serious delays in getting files into active short sales where the homeowners have not previously attempted a loan modification. Some people may ask " was a new policy put into effect that in order for a homeowner to do Pre Foreclosure Sale that they must first attempt to do a loan modification ?" In fact this is not a new policy and is a requirement for all FHA loans. The only way to get around from a borrower attempting a loan modification prior to a short sale is if the reason for delinquency is one of the following: DEATH of borrower, DIVORCE, NO INCOME, RELOCATION OF JOB, all requiring proper documentation (divorce decree, death certificate, etc). If the hardship is any other reason it will have to be reviewed for all workout options available. This information was provided to us directly from a member of the BOA escalation team who is assigned to assist us in all the short sales our team is assigned too.
If you have any additional questions regarding short sales please feel free to send me a message.