This is HUGE news for anyone considering a short sale with Bank of America. If you read my blog post titled “Short Sale Pitfalls” you should know that the key in any short sale is getting the lender to waive their right to pursue a deficiency. B of A was one of the lenders that was notorious for refusing to waive their deficiency rights. I had just about reached the point where I refused to take on any short sale listing with B of A as the lender because they would not budge on this. I just read an article today that hinted that things may be changing.
Jack Schakett, Bank of America Senior Vice President for credit loss and mitigation strategies, said this week if a borrower proves he or she cannot continue paying the mortgage on a house and has few or no assets, the bank will waive its right to a deficiency judgment during the closing of the short sale deal. However, if someone can afford to pay, or has assets, the bank will try to negotiate a set fee for the borrower to pay at closing to the bank. If the borrower refuses to turn over any financial information, the bank will retain its right to go after the money in the long run.
It sounds to me that Bank of America wants to help the homeowners that are truly suffering a hardship but does not want to help those that may have executed a strategic default. In other words, those homeowners that can afford to make their payments but can’t swallow making payments on a home that’s underwater will probably have to contribute something in order to get deficiency rights waived.
I have 2 Bank of America short sale listings right now and I look forward to seeing this get implemented.