Here is a great piece about B of A. Since it looks like they will be removing the language outlined in the article below, it stands to reason they could be doing this across the board. This is one of the many tiny steps necessary for the short sales to start closing faster and become less daunting to sellers and buyers.
Here is the article by
Online PR News – 09-January-2011
Nevada Real Estate Agents will soon notice major changes to the short sale approval letter issued by Bank of America. Bank of America has changed the verbiage of their standard short sale approval letter, deleting verbiage referring to the bank’s right to pursue a defiency judgement against a homeowner.
A deficiency judgement is a lawsuit which a bank may file against a homeowner whose mortgage foreclosure sale did not produce sufficient funds to pay off the loan in full. Since each state has different laws pertaining to short sale and foreclosure, banks have created different short sale approval letters for each state. For example, a Bank of America short sale approval letter issued to a California homeowner may contain completely different verbiage than a letter sent to a homeowner in Nevada.
Most Nevada Realtors and Real Estate Attorneys will agree that the short sale approval letter which Bank of America has used in the past contained verbiage which intimidated many homeowners from pursuing a short sale on their home. According to Bill Myers, Nevada’s top short sale Realtor and owner of The Myers Team with Century 21 MoneyWorld, “Bank of America’s new approval letter changes everything for homeowners considering a short sale. This is a huge victory for Nevada homeowners.”
While Bank of America’s new short sale approval letter is much better for Nevada homeowners, the fact remains that Bank of America has been slow to react compared to other financial institutions. According to Myers, “Most major banks no longer include deficiency verbiage in their approval letters. We are very pleased that Bank of America has revisited their policies and made a decision which actually helps Nevada homeowners in distress. The verbiage of the old letter was intentionally harsh, and designed to intimidate homeowners considering walking away from their home. We assume that the attorneys who wrote the original Bank of America letter were hoping that harsh verbiage would scare a homeowner into making their mortgage payment, however, this is not reality.”
It is believed that the recent surge in Nevada bankruptcies has played a role in Bank of America’s decision to change the verbiage of their approval letter. Homeowners are unsure of their options, and many have chosen to file bankruptcy for protection from the bank, however, according to Myers, “Filing bankruptcy only makes things worse.” Myers said, “Filing bankruptcy to protect yourself from the bank is like cutting off your hand because of a hangnail.”
According to Myers, “The reason to do a short sale is to minimize damage to your credit and avoid being sued by your bank.” If you file bankruptcy, your credit is destroyed. We have closed hundreds of short sale transactions, and have yet to see a bank file a deficiency judgement lawsuit against one of our clients. Unfortunately, some bankruptcy attorneys have capitalized on the fear of Nevada homeowners, and convinced people that bankruptcy is their best option. This could not be farther from the truth.” Myers said.
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