How to get your Bank of America short sale approved?
When the housing crisis hit in 2007, Bank of America earned a reputation for being the worst bank to negotiate a short sale. Bank of America’s reputation was so bad that agents refused to list a property with Bank of America loan because they figured they would never get paid. And even if a short sale listing agent did list the house, buyers’ agents would run the other way. They wouldn’t write contracts on a deal that had no chance of closing.
Realtors reported many of these horror stories to the media. Bank of America was notorious for losing documents, closing files or refusing to respond to updates on short sale files. Short sales on homes dragged out for years.
But in 2009, Bank of America introduced the Equator system, which streamlined the short sale process from a few years to a few months. After Equator stepped in, real estate agents have been able to get short sale approvals in 30 to 60 days on average.
Before submitting the short sale package, check with the seller as to what type of loan they have. If its an FHA, VA or HAFA short sale, it will require a specialized department within Bank of America.
If the loan type is not any of these, follow the same general guidelines (similar to Chase short sales and Citimortgage short sales) for submitting a Bank of America short sale package. The seller portal is separate from the realtor portal, so seller’s have their own area to upload their hardship documents.
Seller to upload:
- Bank of America authorization to release information (their form)
- Bank of America financial worksheet (their form)
- Hardship letter – preferably handwritten
- Bank statements
- Tax returns
- Payroll stubs
Short sale real estate agent to upload:
- Listing agreement
- Multiple listing – MLS printout for the property
- Preliminary HUD one or closing statement – showing Bank of America’s net
- Purchase contract
- Short sale addendums
- Approval letter or proof of funds
The short sale real estate agent must also submit information pertaining to marketing the property. Almost all information is uploaded to the Equator system, minimizing phone communication. Steps the short sale listing agent needs to take to expedite the approval process are:
- Open an account on Equator.com
- Upload the complete short sale package and any documentation Bank of America processors ask for; this will appear on the screen for the loan.
- Negotiate the contract with the buyer’s agent, fetching the highest price possible.
- Complete Equator tasks.
- Submit final HUD prior to closing.
Each investor may have different guidelines for the closing costs they will cover. Customary closing costs on the HUD-1 are:
Settlement fees (reasonable costs)
Bank of America generally does not pay for home warranties, delinquent utilities, past due HOA fees, and pest work or repairs. Bank of America will generally counter that these feeds be removed from their responsibility on the HUD-1.
Seller's Responsibilities for Bank of America Short Sales
The seller uses a different website to upload information. That website is the Bank of America homeowner portal. Seller’s must do the following to facilitate the short sale process:
Create an account
Upload documents as requested
Supply hardship reasons
Submit financial information
If you have any further questions about short sales, please contact us.