Bank of America Short Sale Forms Advisor

While short sales in Sacramento are not nearly as common today as they were a few years ago, there are still some of them out there. And thankfully after nearly a decade, Bank of America has made it easy to determine just which forms are necessary to submit to request a short sale.

In order to obtain a complete checklist of documents necessary for a Bank of America short sale, you will need to know a couple of things:

• What entity owns or insures the loan? It could be Fannie Mae, Freddie Mac, FHA, VA, USDA, or none of the above;
• Is there anyone in the household that pays household expenses who is not a borrower on the loan? That should be easy enough -- a non-borrowing spouse, domestic partner, boyfriend/girlfriend, parent, child, roommate, etc.

Bank of America will require income, expenses, asset and hardship documentation from the borrower(s). This usually involves providing recent bank statements, paystubs, tax returns, etc. and possibly consenting to a credit check. Additionally, they now require similar documentation from any non-borrower who contributes to the household expenses.

The Bank of America forms advisor is here: https://homeloanhelp.bankofamerica.com/en/document-checklist.html 

Short Sales are still selling in Sacramento, but they are a significantly smaller piece of the puzzle than before...

I met with a new buyer client last week, and during the course of our appointment, she asked me my thoughts about the possibility of  purchasing a short sale home. I explained that short sales, foreclosures, and "distressed properties" generally were far less prevalent in the Sacramento real estate market today than they were a few years ago.

Just the pure ratio of short sales to other types of listings in the market is low, so I suppose statistically buyers these days are less likely to purchase a short sale. Last quarter (November, December, January) there were 381 short sales in Sacramento County out of 5597 total homes for sale. That's less than 7% of all inventory.

This graph above portrays the market for short sale listings only in Sacramento County over the last 6 years. I remember there was a time about 5-6 years ago when ALL of my listings were short sales. All of them. 100% of them. That was a chaotic time in the market. An a chaotic time to be a short sale listing agent. I had many active listings, all of them short sales at varying stages of negotiation, and had to wake at 5am to start calling banks with loss mitigation departments on the east coast to negotiate payoffs. And most of my listings had both a first loan, and a second loan or home equity line of credit (HELOC), not to mention a few that had 3rd loans, or maybe IRS or FTB tax liens. Eh, I've done it all.

In 2015, only 20% of my listings were short sales. That is significantly fewer than 5-6 years ago, though proportionately more than double of the market in general. Considering I cultivated a deep skill set in negotiating short sales, it makes sense that while they are a tiny piece of the overall Sacramento real estate market right now, that I am still closing a fair number of them.

FHA Short Sales must now be marketed in MLS for a minimum of 15 days per new HUD guidelines...

Effective as of October 2014, some new Housing and Urban Development (HUD) guidelines per their Mortgagee Letter 14-15 now require agents to have a FHA short sale property listed on the Multiple Listing Service (aka, the MLS) for a minimum of 15 days before any purchase contract can be reviewed by the servicer.  This 15-day requirement starts when the property began listing on MLS at the appropriate price in relation to the Federal Housing Administration (FHA) "as-is" appraised value. Keep in mind FHA short sale sellers, this is NOT the date of the listing agreement, since usually listings are entered into MLS at a later time after the listing agreement is signed and dated. My guess is that this is in response to short sale properties not being marketed open and fairly to generate the highest and best offer for the short sale...

How to remove the monthly Mortgage Insurance payment, aka MI or PMI, from your home loan...

With Sacramento home values on the rise, several past clients have gotten in touch with me recently wanting to know three things: (a) how much is their home worth, (b) is it worth enough to remove my mortgage insurance, and (c) what is the process to do that?

First for those who don't already know, I should explain what Mortgage Insurance is. Mortgage Insurance, aka MI or PMI, is insurance that borrowers must pay for and is typically required for conventional mortgage loans when down payments or equity is below 20%, and ALL FHA loans. This insurance compensates lenders or "investors" for losses due to the default of a mortgage loan. The cost of mortgage insurance varies based on the amount of the initial downpayment for the loan, and how large the loan itself is.

So for example, if a buyer purchased a home with a conventional loan for $175,000, and made a 5% ($8,750) downpayment, the total loan would be approximately $166,250. At a 5% interest rate, the total monthly mortgage payment including loan principle, interest, property taxes, homeowner's insurance, and mortgage insurance would be approximately $1,235. About $109 of this payment would be mortgage insurance. Alternatively, if a buyer purchased a home for $400,000 and made a 10% ($40,000) downpayment, the total loan would be approximately $360,000. At a 5% interest rate, the total monthly mortgage payment would be approximately $2,625, and about $159/month would be mortgage insurance.

Wouldn't it be nice to erase that mortgage insurance portion of the payment and save some money? Here are the requirements for requesting the cancellation of your mortgage insurance on your primary residence:

• You must not have any "subordinate" loans. Basically you can not have a Home Equity Line of Credit (HELOC), 2nd mortgage, etc.
• You must have a good payment history -- don't make late payments!
• You must have been making payments on the loan for at least 2 (or more) years. Sorry...if you bought your house last year you have to wait...
• Your loan balance is either 80% of your original sales price, or you can demonstrate that your home has increased in value so that you have 20% equity.

So basically -- If you bought your Sacramento home for $175,000 2+ years ago, and you currently owe about $161,000 (based on my scenario above, the original financed amount of $166,250 would have been paid down to that amount), you must be able to demonstrate that your home is worth more than $200,000. The lender will determine the value either by an AVM -- a Zillow-like automated valuation tool, or you can do a full appraisal. You must provide a written request for cancelling your mortgage insurance. Call your loan servicing company and ask them where to send this request. Some will allow you to do this by fax and others will require it to be mailed. Specific criteria may differ from lender to lender, and mortgage insurance company to mortgage insurance company, so do your homework.

Given the current upward thrust of the Sacramento real estate market, many folks who financed a Sacramento area home 2 years ago will be able to make a strong case to their loan servicer that this monthly mortgage insurance be cancelled.

Another thing to note is that per the Homeowners Protection Act of 1998 (HPA), which covers single-family primary residences whose sales were closed on or after July 29, 1999 -- a borrower can request cancellation of mortgage insurance on the date the mortgage loan balance is first scheduled to reach 80% of original value, based solely on the initial amortization schedule of your loan (how it's paid down with your monthly payments), regardless of the outstanding balance of the loan. Again, you must request this of your loan servicer in writing and meet other criteria -- like timely payments.

If I can provide you with an estimate of your home's value to help you determine this, please send me an email to erin@erinstumpf.com and I am happy to provide you the data and a letter template to make your request to the loan servicer. If you have read my blog posts about tools like Zillow, you will know that I believe they are completely inaccurate (and for Sacramento homes, mainly just too low right now!).

Unfortunately, if you purchased with an FHA loan, you have a much longer wait (anywhere from 5 years, to when you pay off your loan, depending on when you made your purchase) to remove your mortgage insurance. Depending on your circumstances, if you have adequate equity and a good payment history -- it might just make sense to refinance your loan. One of my past FHA buyer clients is refinancing, transitioning from a 30-year FHA loan to a 15-year Conventional loan. He is lowering his interest rate, and getting rid of the MI, and his monthly payment is staying about the same! So basically he will own his home in half the time. Amazing...

How I use Twitter to get my Sacramento short sale listings approved...

Let's just say when I negotiate short sales, I don't like to sit back on the fence and wait for things to happen. If you follow me on Twitter (@erinnstumpf) you may already know that I was not getting the response I wanted from a short sale lender (who shall remain nameless) for one of my own Sacramento listings this week...I know this is a Freddie Mac loan thanks to information I obtained from both the lender and the Freddie Mac loan look-up tool. So rather than wait, I thought I'd try to engage Freddie Mac directly to escalate this short sale file.

How would I do that, you ask? Freddie Mac is the 800-lb gorilla government sponsored enterprise that owns (aka, is the investor for) a large percentage of the loans serviced by the big lenders (your Bank of America, GMAC, CitiMortgage, Wells Fargo, Chase, etc). I tweeted them!

Twitter is an outstanding tool to get a company, or in this case, a GSE's attention. As you can see from this screen shot, Freddie Mac is all over it this morning. Twitter is just one tool in a large arsenal I have to help my short sales happen. Most real estate agents aren't connected to Twitter, and many who are don't think to use it this way. I know my clients appreciate my creative maneuvering to get their short sale transactions closed.

Got an issue with a Fannie Mae Short Sale? Escalate the issue here...

Fannie Mae announced a new "HomePath for Short Sales" tool to help agents resolve short sale issues in a faster, more efficient manner.  This website provides a platform for a short sale "escalation" process and is available to any real estate professional working on a short sale involving a Fannie Mae-owned loan.

Fannie Mae "owns" or "is the investor" on many of the loans serviced by the big banks (and some smaller ones) like Bank of America, Wells Fargo, Chase, GMAC, CitiMortgage, Nationstar, etc. Often times, a while a loan servicer drives much of the short sale process, it is Fannie Mae that gets the final decision regarding the approval of a short sale. Click here to find out if your loan is owned by Fannie Mae.

So basically if you are having a challenge with a Fannie Mae short sale -- for example, the loan servicer isn't being responsive with a approval or rejection decision, a valuation was ordered but not completed in a timely manner, or the value of the property for sale was appraised higher than the market value, or a subordinate lien holder (2nd mortgage, home equity line of credit, etc) isn't cooperating -- open an inquiry with them and Fannie Mae will directly engage with the agent or loan servicer to address the issues. Keep in mind that you will need to be armed with SPECIFIC and detailed information regarding the transaction and the issue you are experiencing.

Agents can also use the new escalation process to receive a recommended list price from Fannie Mae prior to listing the property for sale, which is also awesome!

If you have your home listed for a short sale, the loan is owned by Fannie Mae (you can look that up here), and are experiencing issues -- encourage your agent to escalate the issue immediately. OR if you have a Sacramento home with a Fannie Mae-owned mortgage, be sure to list the home with an agent who is familiar with these escalation processes. If you are thinking about doing a short sale, of course I welcome your call to see if we are a fit to work together.

Bank of America -- no longer will delay foreclosure for a "Cooperative Short Sale"...

Just received this notification via email from Bank of America regarding their "Cooperative Short Sales" program:

"As of January 15, 2013, there will no longer be a temporary foreclosure hold during the Cooperative Short Sale property marketing phase. We may begin or continue the foreclosure process up until a submitted offer to purchase the property is approved by all relevant parties.  Any existing short sale will not be impacted by this change."

So, again, I can't emphasize to you enough that anyone considering a short sale should be pro-active and do not wait until the last minute (like once a Notice of Trustee Sale has been taped to your front door) to start your short sale. Bank of America will not delay a foreclosure in order for a short sale seller to start the process and market the home.

Sacramento Short Sale Sellers: Cancellation of Debt Forgiveness has been EXTENDED another year!

Well, ding dong, hallelujah, oh yeah, yahoo, and boom! Not only does it seem that the United States won't tumble over the "Fiscal Cliff", but federal lawmakers have extended some very important provisions for Sacramento homeowners through the end of 2013.

I'll start with what I think is the most important one first -- this affects short sale sellers.

A few weeks ago, I was quoted in a Sacramento Business Journal article about the the need for an extension of the Cancellation of Debt Forgiveness for short sales. The existing legislation was in place through January 1, 2013 (yesterday). This provision basically cancels the income tax on the "forgiven" debt in a short sale. So over-simplified -- if you owe $300,000 on your home, and short sale it for $200,000 - you have been "forgiven" $100,000 in debt. The IRS traditionally views this sort of forgiven debt as income, and as such the homeowner would have to pay income tax on this $100,000. Thankfully, the US House of Representatives and the Senate extended this another year until January 1, 2014. Short sale sellers -- you still need to speak to your trusted tax professional to make sure you are protected by this legislation. While it applies to most homeowners, it does not apply to everyone! For example, one of the provisions is that the property must be owner-occupied primary residence in order to qualify for cancellation of debt forgiveness. Again, talk to your CPA.

All in all though, this is a huge break for Sacramento short sale sellers. I have short sale listings that did not close in 2012...so those sellers were anxiously awaiting for this to be extended. I also have been speaking with many potential short sale sellers who were waiting to list their homes until they knew if the cancellation of debt forgiveness would be extended. If you have questions about listing your home as a short sale in the Sacramento area, I am happy to answer your questions and speak with you in more detail. Feel free to call (916-342-1372) or email me.

The other items that were extended via the "Fiscal Cliff" legislation -- mortgage insurance premiums are still tax deductible for taxpayers making under $110,000. This was retroactivated for 2012 and extended through 2013. Also, a 10% tax credit (up to $500) for homeowners for energy improvements to existing homes is extended through 2013 and made retroactive to cover 2012.

So good things for 2012 and 2013...it's going to be a great year!

So I am a Certified Distressed Property Expert (CDPE)...I'm sure you can sense my enthusiasm...

Well, for the last couple of days this week, I have been in a classroom earning my "Certified Distressed Property Expert" designation, aka the CDPE. Between my own listings and those that I have negotiated on behalf of other agents, I have closed somewhere near 75 short sale listings....So while I can't say I really learned anything new that I haven't experienced first hand in one of my transactions -- this is definitely a solid course that can provide agents with a basic understanding of some of the fundamentals of doing short sales. This class is no substitute for experience though...so if you are thinking about doing a short sale on your own property, be sure that you ask your agent for client references and find out just how much experience they have in addition to that fancy CDPE designation that cost $450 (plus the upgrade to become an "advanced member" of the CDPE family for only $149 down and $99/month).

Many short sale lenders (like Chase, Wells Fargo, Bank of America, GMAC, CitiMortgage, etc) are now referring their distressed borrowers/sellers only to agents who have this CDPE designation, so I finally pulled the trigger and took the classes. Candidly, I was a little annoyed that after all my experience and depth of knowledge in Sacramento short sales I was forced into taking this course in order to justify to banks that I am competent to do these transactions. So anyway, now I am a CDPE for a year, until I cough up much more money to extend it another year. Extortion if you ask me. But whatever. I guess I just bought some additional credibility. And it's a good tax deduction at the end of the year.

Ask Erin: What happens to my short sale if my loan servicing is transferred to another company??

I listed a short sale in Orangevale a few weeks ago...at the time I listed the house, the loan was serviced with Bank of America and the sellers and I were navigating our way through their "Co-Operative" short sale listing process (where we complete a few steps in advance in order to list the property with a pre-approved short sale price). Then something happened...we were notified of an upcoming "Service Transfer" and the loan would be moved from Bank of America to another lender for servicing. Huh?

This does happen from time to time. Bank of America, like many other large lending institutions, services mortgage loans for hundreds of investors. An "investor" could be Fannie Mae, Freddie Mac, a hedge fund, another bank, etc. As a part of normal loan servicing, these investors may opt to release or transfer servicing from one company to another company.  In most cases, once the servicing transfer occurs, the short sale process ends with Bank of America and the homeowner must contact the new servicer to start navigating that company's short sale process.

When I list short sale property, I generally talk about the possibility of this happening with the seller. This is not a really common occurrence mid-transaction (this has happened only 4 times out of all of the 100+ short sales I have worked on), but a servicing transfer is a risk that may occur at any time during the short sale process -- EVEN after a short sale has been approved! This is one of the reasons why it is important to move as quickly as possible to facilitate a short sale.

Generally, if your loan is going to be transferred from one servicer to another, the current servicer will send the homeowner a letter 15 days before the servicing transfer date. The lender may or may not contact the listing agent -- so short sale sellers PLEASE open your mail and keep your agent in the loop as far as what the communications say! The new loan servicer will send a introduction letter to the seller with a new loan number and payment or collection info. One thing to note -- before you send ANY payment or personal information to the new servicer, please call them to verify that your service has been transferred and the new mailing address. Some fraudsters will send bogus letters in an attempt to get you to mail them money or steal your identity! If an offer has already been accepted on your short sale, a closing has been set and an approval letter issued, the new servicer will determine if the short sale will continue. Unfortunately the new servicer may not be obligated to honor the approval.

New Listing - 6100 Palmaya Lane, Orangevale, CA 95662

Well maintained 3 bedroom, 2.5 bathroom, 1,426 square feet Orangevale home on .14ac lot in a lovely gated community! You will love the open floorplan, spacious kitchen with tile counters and breakfast bar, master suite with amazing bathroom, large rooms, extra storage, backyard is one of the largest in the neighborhood! Low HOA dues! Offered at $195,000, subject to lender approval of short sale. For more photos and information, please visit 6100 Palmaya Lane, Orangevale, CA 95662.

Sacramento Real Estate Listing Inventory September 2012

Where have all the Sacramento home listings gone? Well , there are not as many homes on the market in MLS. AND the homes that are listed are selling quickly. Our absorption rate in Sacramento is amazing - we have less than one month's worth of housing inventory on the market. In fact, we have nine tenths (0.9) of a month of for sale housing inventory here in Sacramento County. I am seeing multiple offers on my listings, and it's really competitive out there. I have six theories as to why there are not too many homes on the market right now. When I wrote my "Six Theories" post in May of this year, interest rates were higher then than they are today -- they were around 4% vs. 3.25% today for a 30-year fixed loan -- and our median home price in Sacramento has increased from $167,000 in May to $180,000 last month in September. Statistics don't lie...the market is HOT! I think most home buyers have decided now is the time to buy...and with prices increasing, perhaps folks who need to sell will decide now is the time to sell...

Bank of America updates its "Pre-approved Price Short Sale" and "Short Sale Relocation Assistance" Programs...

If you follow me on Twitter or Facebook, you will already know that I got an email from Bank of America's short sale department this morning notifying me of some changes to their short sale program. To quote the email from BofA, it reads:

"Bank of America Short Sale Relocation Assistance Program: Your clients could receive $5,000 to $30,000 in relocation assistance. Your financially distressed clients want to avoid foreclosure. You want to help them. So do we! That's why Bank of America is excited to offer enhanced relocation assistance. Qualified homeowners who initiate a Pre-approved Price Short Sale (without an offer) could be eligible to receive $5,000 - $30,000* in relocation assistance and owe no more on their mortgage with the sale of their property, depending on the investor involved. Don't miss this limited-time offer to get your distressed clients the help they need by initiating a 'Pre-approved Price Short Sale' today."

So how is this different from BofA's previous short sale program? Well, the lower end of the incentive range was increased from $3,000 to $5,000. In order to participate, the short sale process MUST be initiated BEFORE the property is listed and has an offer. In fact short sales initiated at the time an offer is received are specifically excluded from the enhanced relocation assistance funds. This also now applies to homes that are non-owner occupied! A short sale must be initiated by the end of this 2012 and close by September 26, 2013, to be eligible for the incentives.

If you have questions regarding if your Bank of America mortgage loan on a Sacramento-area home may qualify for this short sale program, please contact me. I welcome your call to see if we are a good fit to work together.

It's August 1st...Have you started your short sale yet? Time in 2012 is running out...

No, I am not referring to the 146 shopping days left until Christmas. I am referring to the time left (152 days) in 2012 that short sale sellers can still take advantage of some of the state and federal debt forgiveness tax laws. Many short sale sellers who occupy their home as a primary residence and meet other criteria will have little or no tax consequence from completing a short sale in 2012. Many short sale sellers have benefited from legislation in place protecting them that will expire December 31, 2012. The difference in closing a short sale in December 2012 and January 2013 could cost a distressed homeowner several thousand dollars in taxes. I am not a CPA and refer my clients to tax professionals to seek advice in this regard to make sure these laws apply to their situation.

In a nutshell (and completely over-simplified), if a homeowner does a short sale and owes $300,000, and the NET proceeds from the sale that a bank will accept in a short sale equal $200,000, the seller of the property receives a 1099 from the bank for $100,000 (the amount of the "forgiven" debt). You will get this 1099 regardless of when you close your short sale, BUT for short sales closed in 2012, many sellers will not have to pay income tax on this "forgiven debt." If you close in 2013, if the current legislation in place remains un-extended to a later expiration date, you could have a very large tax bill to pay when you file your taxes the following year. Again, speak to a CPA regarding how this affects your situation. If you need a referral to one, contact me and I am happy to give you one.

Given the length of time that short sales take, if you want to complete a short sale in 2012 you need to start the process NOW.  Think I'm exaggerating? Assuming a seller doesn't have some odd circumstances, the lifespan of a typical Sacramento short sale looks something like this:

-Listing the property, preparing for showings, gathering financial and hardship info to submit to short sale lender: 7-14 days. My vast short sale experience tells me that most folks can't (or won't want to) list the house tomorrow and start showing it by this weekend. If your average seller called an agent today, met with that agent tomorrow, then spent time gathering their financial info and making the house presentable making arrangements for pets, extra house keys, etc., the house would realistically hit the market within 2 weeks.

-First on market day, showings, and seller accepted offer to submit to lender: 7-10 days. Let's face it, if a property is priced correctly and the seller is flexible with access to the house for showings, given the current lack of homes on the market, this process should be relatively quick.

-Lender receives all financial and hardship information from the seller, purchase contract and supporting documentation, assigns a negotiator and orders BPO valuation of the property: 7 - 14 days. Some short sale lenders are faster than others. Most of the larger banks (Chase, Wells Fargo, BofA, GMAC, CitiMortgage, HSBC, etc) have pretty streamlined processes for getting the files assigned to folks and the initial BPO values established.

-BPO agent/appraiser visits property and returns value analysis report to short sale lender: 7-14 days. For the sake of defining it, a BPO essentially an appraisal ordered by the short sale lender. This is their method to best validate the buyer's offer received and determine the fair market value of a property. The folks who do these BPO's are unaffiliated 3rd parties who might have 20 other BPO's to do at the same time. Once the assignment is received, it might take them a few days to fit visiting the property into their schedule (longer if the house is occupied and they must coordinate access to the house with someone else), then visit the property, then complete the report and submit back to the short sale lender that ordered the BPO.

-BPO received by negotiator, analysis of file: 7 - 45 days. Yikes. This can take a long time...the file could be re-assigned to a new negotiator and it could go to the bottom of that person's stack.

-Submitted to investor or management for final approval: 3 - 30 days. Again yikes. Depending on who actually controls the decision-making process of the loan, this could be super fast, or painfully slow. Best case scenario is that the loan is owned by the short sale lender itself and it's just making a management decision if the short sale fits within its internal guidelines, OR, perhaps Fannie Mae or Freddie Mac must approve the short sale. Or perhaps the loan is owned by a Hedge Fund, or a Retirement Fund. If it turns out that the Missouri State Teacher's Retirement Fund owns the loan for example (not to pick on them, if they even exist LOL), and Margie in Accounting is the ultimate decision-maker, you might be in for a longer wait.

So then approval issued! Yay! Now what...well depending on the offer you received from your buyer, you will be looking at 21-45 days to close your escrow, barring no additional surprises with the buyer's loan or inspections, of course.

So on the fast end of the normal timeline spectrum from the day the house hits the market to the day the short sale is approved -- you are looking at about a month if all the stars align, plus the time it takes for the buyer to close escrow. If you are this fortunate and have a very straight-forward short sale and no surprises, congratulations you still have plenty of time to complete your short sale before the end of 2012.

On the longer side of the normal timeline spectrum from the day the house hits the market to the day the short sale is approved -- you are looking at 3-4 months, plus the time it takes for the buyer to close escrow. This timeline is more realistic for most short sales, AND it will push you to the very end of 2012. It'll be stressful, but you have time to get your short sale closed.

So...if you need to do a short sale and can benefit from the tax laws that will expire at the end of 2012 - what are you waiting for? I welcome your call if you have questions I can answer or to see if we are a fit to work together.

Short sale and appraisal crisis averted...but it put a crimp in my afternoon schedule...

I visited a short sale condo in Natomas today that I have in contract with a buyer client...it should have been a 5-minute visit to the property to let myself in, to install a carbon monoxide detector before tomorrow's appraisal, and then leave. But those plans were thwarted by Safeguard Properties. It's not really their fault...they are just doing their jobs.

Ever heard of them? No? They are a "property preservation" company. They work on behalf of many loan servicers (like CitiMortgage, GMAC, Chase, Bank of America, Wells Fargo, etc), and they employ field reps that monitor properties in default or with past due balances. Why, you may ask? Their sole job is to make sure that the bank's "assets" (aka, properties their loans are on) are in decent condition, being properly maintained by their occupants, and that they are properly secured. If that field rep determines that a property is vacant, not secure, or not being properly maintained, those reps post notice on the house (usually on the front door or front window) requiring that the occupant or "responsible person" contact them via a toll free number immediately -- usually within 2-3 days. Occasionally the listing agent or homeowner will receive a follow-up call once this notice is posted, but not always. If nobody contacts the field rep, then many times that person, who is acting on behalf of the loan servicer, will take it upon him/herself to make sure the physical integrity of the "asset" is not compromised. What does this mean?? Usually it means they change the locks and take whatever measures they believe to be appropriate to secure the house (like board up windows, lock side gates, etc). I blogged about this a couple years ago.

I always give my short sale sellers a heads up that monitoring from a property preservation company like this is a possibility, and that they really need to make the effort to maintain their property if they are not living there, keep it secure, and monitor the house for notices of this nature.

This listing agent did not prep her seller. So, when I arrived to open this unit to install a carbon monoxide detector, the key in the MLS lockbox did not open the lock, and there was another combo lockbox on the front door. I ended up waiting around for more than an hour while the listing agent called the field services rep to get the combination to the new lockbox on the house. Once she was able to give me the combination to this new lockbox, I entered and installed the carbon monoxide detector, and I then had a look around. I noticed that none of the lights worked and the toilets were empty. I found the electrical panel and all of the breakers were in the "off position." I turned them on. I also turned on the water to the toilets and made sure they flushed properly.

Thankfully I visited the house today, BEFORE the appraiser was scheduled to come out tomorrow...most likely he would not have waited around for an hour while the listing agent obtained the combination to the new lockbox, and may have charged an additional fee to my buyer client to re-visit the house at a later date. If the appraiser had indeed waited around, then the utilities would not have been operable for his inspection, which would have also required him to make another visit to the property. Either of these scenarios would have cost my buyer money and the timeframes in the transaction may have been delayed.

So after nearly 90 minutes at the house, I put a copy of the new key in the MLS lockbox for the appraiser to use tomorrow to access the unit, made sure the utilities on and light and plumbing fixtures functioned properly, oh yeah, and I installed that carbon monoxide detector -- a potential crisis was averted...

Bank of America is now offering up to $30k for doing a Sacramento Short Sale...

If you follow me on Facebook or Twitter you will already know that last week I received a notice from Bank of America that for a limited time, they are offering a relocation incentive of up to $30,000 to homeowners who complete a short sale. WOW. No you did not just hallucinate. Thirty. Thousand. Dollars. For completing a short sale of your Sacramento home.

If you are a homeowner with a Bank of America mortgage and are considering a short sale, you must list the house as a short sale and allow your agent to "initiate" the short sale in BofA's online short sale management portal (aka, the Equator system), so your file can be reviewed by Bank of America loss mitigation.

Per Bank of America, the relocation assistance payment is calculated based on the appraised value of the homeowner's short sale property. The total amount will be no less than $2,500, but no more than $30,000. The payment will be delivered at the time of closing if the homeowner complies with all terms and conditions of their short sale agreement, which includes but are not limited to the following: a full walk-through appraisal must be completed and the homeowner must satisfy all junior liens and provide clear title for the property (the relocation assistance payment can be used to clear those liens). The short sale must close by September 26, 2013.  If the homeowner does not comply with all terms and conditions of their short sale agreement, they will not receive the relocation assistance payment.

I can help you navigate this BofA short sale process if any of that sounded like a foreign language to you.

As I mentioned, per Bank of America, this is a limited time program...while the short sale must close by September 26, 2013, the program must be initiated prior to then -- however they have not specified an initiation expiration date. If you are a Sacramento-area homeowner, have a Bank of America mortgage and need to do a short sale, I welcome your call.

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.

Are you a Bank of America employee looking to purchase a home? Better make sure that you are not purchasing a BofA distressed property...

Got an email from Bank of America today regarding its policy for the sale of Bank of America short sale, REO/foreclosed properties to Bank of America employees. Basically, they are now prohibiting BofA employees and their immediate family from the purchase of any of its distressed properties.

This is consistent with the short sale policies of other large national mortgage servicers. I encountered this with a Wells Fargo short sale listing of mine last year...we received an offer from a buyer who turned out to be a Wells Fargo employee, and that person was not able to purchase the house due to their affiliation with Wells Fargo. Luckily we found another buyer who was able to complete the purchase.

Under the BofA's policy, "bank associates and members of their households may not purchase bank REOs, short sales and foreclosures. Members of the household include spouses, domestic partners, dependent children who live with the bank associate, or any other person who derives his or her primary means of financial support from the bank associate (household members)."

Now, when submitting a short sale offer to Bank of America, listing agents must also include the "Buyer's Acknowledgement and Disclosure" to swear that the buyer(s) is not a Bank of America employee.

I will add it to the growing stack of paperwork...

Sacramento Help for Homeowners Events - Coming March 20th, 2012

Sacramento homeowners who are struggling to make their mortgage payments will have the opportunity to meet face-to-face with their mortgage companies, as well as HUD-approved housing counselors, in an effort to assist explore foreclosure-prevention options and to move toward solutions to their mortgage problems.

Help for Homeowners Community Event
Tuesday, March 20, 2012 from 1:00pm – 8:00pm
Sacramento Convention Center
1400 J Street, Hall D
Sacramento, CA 95814

Free parking is available in the Memorial Garage (entrance on 14th and H Streets). It is highly recommended that you bring with you:

-Request for Mortgage Assistance form
-IRS Form 4506T and/or last two years of tax returns
-Monthly mortgage statement
-Information about other mortgages on your home, if applicable
-Two most recent pay stubs for all household members contributing toward mortgage payment
-Unemployment benefits award letter, if applicable
-If self-employed, the most recent quarterly or year-to-date Profit and Loss Statement
-Documentation of income you receive from sources (alimony, child support, social security, etc.)
-Two most recent bank statements
-A utility bill showing homeowner name and property address

Sacramento Short Sale Information

Bank of America is conducting a "Borrower Outreach" event in Sacramento -- you MUST register in advance!

Bank of America will be holding a "borrower outreach" event this week at the Sacramento Convention Center starting Thursday, November 17th - and going through Saturday, November 19th. Hours of the event each day are from 8am - 8pm. They are encouraging their borrowers to register online and schedule an "appointment" time rather than just dropping in.

Their goal is to help Sacramento Bank of America mortgage customers who are experiencing hardships to find alternatives to foreclosure -- such as loan modification, short sales, etc.

There is a list of documents you must print from their website and bring with you:

• A "Request for Modification & Affidavit" --
• A Hardship Letter -- explains your hardship and why you are seeking assistance
• An IRS Form 4506-T -- this allows Bank of American to request your income tax information from the IRS.
  
• A Dodd-Frank Certification form -- this certifies that you have not been convicted of a financial crime in the last 10 years (among other things, be sure to read it before signing)

There are also other financial documents they want you to bring:

• Recent Utility Bill
• Copies of your 2009 and 2010 tax returns
• Copies of your most two recent bank statements for all accounts
• A summary of your monthly expenses
• Recent HOA bill (if applicable)
• Copies of your most recent two months of paystubs (or profit and loss if self-employed)
• Copies of your rental lease (if property is tenant occupied)

In order to register for your appointment time for the Sacramento Bank of America Outreach Event, visit the Bank of America Events Registration page on their website by clicking here. If they advise you to consider a short sale as an alternative to foreclosure, I am happy to provide you more information regarding the process and assist you as well.