Bank of America Short Sale Approval Letters

By
Commercial Real Estate Agent with Intero Real Estate Services

A few colleagues have asked about recent Bank of America short sale approval letters. In the approval letter under "what this means to the seller", there has what seems like a general clause that lender may (but does not say they will) pursue deficiency judgment if law does not prohibit.

Many agents I know attempt to counter that clause with B of A by asking them to 1099-c and write it off on their books in lieu of pursuing deficiency judgment ever, and also asking them to report to the bureaus as “paid in full”. Most agents want to fight for their clients but they have to be smart about it.

Apparently people have not much success in getting B of A to remove this statement. Impossible, no? My colleagues who have worked in banks before say it is a matter of reaching the banks number. If the bank gets their number then they will remove that wording. Think of it in terms of “A” paper and “B” paper loans. You’ll get you’re loan done with a B paper deal but the terms might not be the best. With an A paper loan, the numbers might look better to the bank and thus terms might look better to the borrower as well. Same with a short sale. Same with a loan mod.

Happy short selling.

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Rainer
34,719
Barbie Burke
Respect Realty - Tempe, AZ

Great info to share since we are held to higher standards for our clients.  It is prudent to ask for the paid in full regardless of whether they will do it or not.  We are working for our sellers and it is the right thing to do. 

Nov 23, 2009 10:38 AM #1
Rainmaker
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Joe and Molly Murphy
Coldwell Banker - Bradenton, FL
Put our Team to work for your Family

Great point, I thought that if they 1099 than they cannot also pursue a deficiency?

Nov 23, 2009 10:39 AM #2
Rainmaker
184,249
Clayton Bonjean
Mainsail Realty Company - Santa Rosa Beach, FL
Broker - Destin - Sandestin - 30A Real Estate

Great info...If they send a 1099 they can still pursue a deficiency.  You will need specific language agreeing to waive the rights of a deficiency judgement.

Nov 23, 2009 10:48 AM #3
Anonymous
Anonymous
Anonymous

Nice bit of info....but as I always say...ugh short sales....

Nov 23, 2009 10:52 AM #4
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Rainmaker
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Keith Rockmael

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