Bank of America Short Sales Failing for Homeowners
Well, it seems that Americas largest bank; Bank of America, is tightening up it’s guidelines now when it comes to Short Sales. For the past say 4 years(since the bubble popped) Bank of America has been the worst bank when it comes to negotiating a short sale for homeowners and now with even stricter rules it does not sound promising to future home sellers who are in foreclosure.
Many of you may be asking what is a short sale, well; a short sale is the sale of a property when a homeowner is upside down on the mortgage- meaning that instead of foreclosure the seller wants to sell his property with a local real estate agent, and have him negotiate with the bank to take an amount less than what is owed.
John Smith owes Bank of America $450,000 for his home. He finds a real estate agent who will list his home for sale and acquire a buyer for the property at Fair Market Value. Well, Fair Market Value for this property is now $300,000. The real estate agent will then negotiate with Bank of America to take this amount instead of foreclosure and now with all the recent laws that have passed acquit John Smith the seller of any repayment for this debt or any junior loans for that matter.
As great as short sales are now for homeowners in this situation, it seems that Bank of America no longer wishes to do short sale and here are a few of the reasons why Bank of America Short Sales Failing for Homeowners.
So why are Bank of America Short Sales Failing for Homeowners ?… In my recent encounter as of 10/1/2011; a short sale negotiator from Bank of America informed us of new changes that will be taking place and they go as follows:
1. Bank of America will no longer be paying for any home buyer closing costs with the exception for FHA/VA Home Loans. Any Conventional, Hard money, Private money or all cash purchases will be unable to receive this credit.(Closing costs in most cases are 3% of the purchase price and cover Escrow Fees, Title Fees, Etc)
2. Bank of America also will no longer be paying any of the homeowners delinquent HOA dues, Property taxes or any other recorded liens against the property in this nature.
3. Lastly, Bank of America will only be paying a maximum of a 4% Commission to Real Estate agents as well. Down from the standard 6% commission usually agreed upon between both Realtor and seller; I fear that many real estate agents will no longer pursue Short Sales from Bank of America.
As Short Sales become better & better for homeowners( at this point they are great, if your short sale goes through with any bank, they can not come after for the difference in the form of a deficiency) the banks are getting stricter and stricter and from it looks like with Bank of Americas new guidelines; it seems as though they want to Foreclose on homeowners.
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