Much to our surprise and delight, it seems that Bank of America is finally becoming proactive in the Florida Real Estate Market. They recently had a pilot program where they would allow delinquent property owners to sell their homes with no deficiency judgement. I found out about this program at its inception, with a phone call from a Bank of America Representative. They were trying to contact an old client of mine, one who was very delinquent in his mortgage payments on a property he no longer lived in.
After speaking with the representative for a short time, I learned of the pilot program where Bank of America would allow this seller to short sale his home, pay him up to $20,000 for the short sale, AND would waive any deficiency judgement against him. This was fantastic, because the only reason this owner was not doing a short sale was due to the fear of a deficiency judgement.
A few days later, I received another phone call, this time from a homeowner that I didn’t know. She told me that she hadn’t paid for her property in over a year and that the bank was asking her if she wanted to do a short sale. I told her I’d be happy to help, but I also wondered how she got my number and who I could thank for the referral. She told me that Bank of America gave her my number as an agent in the area with experience and success in short sales!! That was a huge boost to my ego! Good to know that hard work and dedication are sometimes recognized and recorded by these large institutions. –By the way, the “ego bubble” was burst shortly thereafter when I spoke with Bank of America—they told me that they refer a few agents and can’t refer just one. Seems that I was the only one that actually bothered to answer the phone!! Those of you who have tried to reach Realtors by phone are probably familiar with this frustration.
Anyways, back to the short sale—in this situation the seller refused to provide any financial documentation to the bank, and they allowed it. They sent someone out to do a valuation of the home and this allowed me to market the property at a price already approved by Bank of America, which will cut down months in time spent trying to get short sale approval. So far the process has worked beautifully.
After this terrific experience, I became curious as to why only those owners who were late on payments were being rewarded, while there were others struggling to “do the right thing” and keep payments current. This has always bothered me, and I know it bothers many out there. So I called Bank of America, the office of the CEO and President, and asked them about it.
I presented them a scenario with a client who had purchased a property at the height of the market (purchase price 170k). The property is now worth approx 55k. It was an investment, and has tenants paying $925 per month. The monthly mortgage is $920 per month, so it is basically breakeven. This loan will adjust in a couple of years and the payment will go up approximately $300 per month (it is currently interest only and will become principal and interest). I explained that while this investor was current on the loan, keeping this house was something that didn’t make sense financially. I asked them why those investors who defaulted were rewarded with the possibility of short sale with no deficiency judgment and a financial incentive; meanwhile, those that kept paying and honoring their commitment were offered nothing.
Then, amazingly, after a long hold…. I was told that a short sale was possible for this seller, even though the mortgage was not late!
I have been sent an agreement to participate in the “cooperative short sale” program (different from the Florida Incentive program). I have attached a photo of the approval letter so you can see that it does state that there will be no deficiency judgement, and also a financial incentive for the seller. Bank of America has already sent out someone to do the BPO and valuate the property so that we can list it for sale at an approved price. The seller is thrilled!
While it’s not a closed deal yet, and my experience with Bank of America has taught me that what I think is fantastic can fall apart at a moment’s notice, I am truly hopeful that the behemoth financial institution has perhaps finally put some thought into the individuals behind the loans, and made it possible for the good ones to get some help too.
If you have questions about short sales, or you need to short sell your home, feel free to contact me:
Marcia Castro Socas, MS, MBA, GRI
Broker, Castro Realty Group
cell: 321-228-9967
