The Impact of Servicer Releases on Short Sales

Servicing Release Impacts on Short Sales
(Bank of America Short Sale Agent update 10/30/12)

Bank of America services mortgage loans for hundreds of investors. As a part of normal servicing, investors may decide to release or transfer servicing from Bank of America to another company.

Servicing may be transferred on first, second or stand-alone liens. 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 determine what foreclosure alternatives may be available.

Some key activities that may occur during servicing transfer:

• Bank of America will send the homeowner a letter 15 days before the servicing transfer date.

• Bank of America may call the agent to advise of the impacts to the short sale.

• The new servicer will send a letter or statement advising the homeowner where to send payments.

• 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.

Similar to foreclosure, a servicing transfer is a risk that may occur at any time during the short sale process. This is why it is important to move as quickly as possible to facilitate the short sale.

How to Find A Rental in this Crazy Market

I typically tell people to try Craigslist for rentals or to look in the neighborhoods in which they’d like to rent. Occasionally, landlords will place signs at the property only and not list it anywhere. But more often than not, the rentals appear on Craigslist.

Rentals are very scarce these days but if you are persistent you will find something.

Also, when you are looking in an area in which you want to rent, look for properties that are currently for sale. The market is deep with investors. Once they buy the property, soon after they are trying to rent it out.

Happy rental-home hunting!

Bank of America to eliminate up to 150,000 second liens

(HousingWire, Oct. 1, 2012)

Borrowers with second liens owned and serviced by Bank of America may qualify to get their subordinate debt extinguished entirely.

The banking giant mailed 150,000 letters to pre-qualified homeowners who are eligible to have their Bank of America second-lien mortgages eliminated.

The program was designed to ease the pains of struggling borrowers who are also dealing with issues on first mortgages and to help more individuals create equity in their properties. Borrowers receiving the letter will have second liens on collateral property completely removed unless the customer decides to opt out of the automatic relief by sending a response within 30 days of receiving the letter.

The offer takes care of the entire unpaid principal balance on second liens. Only second liens owned and serviced by BofA that meet certain delinquency and property value guidelines are qualified for the program.

Second lien mortgages associated with a severly delinquent first lien mortgage also qualify as long as the second-lien is serviced or fully owned by BofA. Ownership of the first lien mortgage does not matter as long as BofA has control of the subordinate lien.

Mailings to eligible customers began in July. Only customers who receive pre-qualified letters will be able to use the program today.

The bank points out that eliminating a second lien does not resolve issues with the first. If a first lien mortgage is delinquent or in foreclosure, the borrower still has to work with the servicer to resolve those issues. The extinguishment of the second debt is an attempt to limit other financial concerns, but it cannot resolve issues with the first lien.

The elimination of the second lien mortgage is completely separate from any actions being taken regarding the first mortgage,” BofA said in a statement. “If the first mortgage is in foreclosure, those foreclosure activities may continue.”