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.
Tags:
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.
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.
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...
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?
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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