Tuesday, March 20, 2012

Bank of America - Requiring New 3rd Party Authorization Form for Short Sales

The Bank of America legal department seems to be busy lately, because today I received yet another email from the BofA short sale department regarding a new 3rd Party Authorization Form that they will require starting April 14, 2012.

A 3rd Party Authorization Form is submitted by a property owner to a lender, and this document allows an "authorized 3rd party" permission to speak with the lender on the seller's behalf. As a short sale listing agent, I obtain a 3rd party authorization document from each short sale seller at the time I list a property so that the lender is allowed to discuss the details of the loan(s), the short sale, any pending foreclosure, etc.

I had created my own 3rd Party Authorization Form based on the requirements of different short sale banks, and I have never received any objections from the short sale banks when I have submitted it...my homegrown authorization form included the property address, sellers' names, the last 4 digits of their social security numbers, loan number(s), a note stating that the seller gives me authorization to speak with the short sale bank on their behalf regarding a short sale, and my complete contact information, and then the form was signed by the sellers.

BofA's new 3rd Party Authorization Form takes that a few steps further. In addition to many of the elements of my homegrown authorization letter, there is a section that requires the listing agent to provide licensing information, and sign acknowledging that he/she is a licensed as a real estate agent, will present all material facts pertaining to the circumstances of the short sale, and that the agent will comply with all applicable state and federal laws, rules and regulations governing the services provided.

Fraud prevention at its finest! Nicely done Bank of America.

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