Should You Get A VA Loan with Bank of America?

By
Real Estate Broker/Owner with Mint Properties, Tni LeBlanc (805) 878-9879 CalBRE #01871795
http://actvra.in/h8L

Should You Get A VA Loan with Bank of America?

 

Are you aware that Bank of America’s policies deter offers written with VA financing from being accepted on short sales? They do. And because Bank of America controls so much of the REO and short sale market -- their policies have a tremendous effect. Just last month, Bank of America changed their policy to allow back up offers on their short sales. This one (long overdue) policy change should have a tremendous effect on the amount of time it will take to close a Bank of America short sale, and accordingly, it will drastically reduce days on market for short sale listings overall and hopefully change buyer perception about short sale wait time.  BofA can also have a tremendous effect on the market by changing their policy that makes it more difficult for veterans to purchase short sale homes using their earned VA home loan benefit.

 

 

Eligibility for a VA loan is a benefit earned from military service. It allows the borrower to buy a home with zero percent down and the loan is backed by the Veteran’s Administration. The main issue with Bank of America and VA financing centers on repairs. Guidelines for VA financing do not allow the buyer to pay certain costs, such as the escrow fee, and certain repairs must be paid by the seller, such as a termite clearance and any repairs identified by a VA appraiser. These are not new requirements. They have been in place for quite awhile and Bank of America is quite familiar with these requirements when they are selling a VA loan to a veteran.

 

Why then does Bank of America have policies that make it more difficult for VA buyers to buy a short sale? I don’t know. VA buyers routinely stand at the back of the line when it comes to buying foreclosures because most lenders do not want to do repairs on foreclosed properties - and VA requires them. Quite naturally, in distressed markets, VA buyers who can wait turn to short sales as their next best option. However, Bank of America’s policy is to disallow any repairs, including VA required repairs. What does this mean? Sellers in distress often turn down VA offers because they do not have the funds to pay for repairs, and VA buyers then have an even more difficult time buying a home. Take a distressed market close to a military base and the problem gets even more intensified.

 

Does every lender/servicer take this position and make this recommendation to investors on short sales? No, they don’t. But, Bank of America does and it makes the situation worse for the housing market overall, and for veterans trying to use their VA eligibility specifically. Not to mention that further limiting the pool of buyers for short sales depresses home prices further. Bank of America can roll out 15 Online Resource Centers but until they change some of these policies that are hampering the housing market and its recovery, I would say that their efforts are not sincere. For Bank of America to actively market to VA buyers while maintaining this type of policy is hypocritical, in my opinion.

 

So, if you are getting a VA loan, should you go to Bank of America? Why would you? Their policies make it harder for military service members who have earned their eligibility for VA financing to buy homes in distressed markets. Since you have a choice about where to get a VA loan, why would you go to Bank of America?

 

Tni LeBlanc is an independent Real Estate Broker, Attorney, Short Sale Agent, Certified HAFA Specialist (CHS), and Certified Distressed Property Expert (CDPE) serving the Santa Maria, Orcutt and Five Cities area of the Central Coast of California.

 

* Nothing in this article is intended to solicit listings currently under contract with another broker. This article offers no legal or tax advice and is for information purposes only. Those considering a short sale are advised to consult with their own attorney for legal advice, and their tax professional for tax advice prior to entering into a short sale listing agreement. Mint Properties is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.

 

Copyright © 2011 Tni LeBlanc *Should You Get A VA Loan with Bank of America?*

Posted by

Tni LeBlanc, Broker
(805) 878-9879 mobile/text

tni@mintprop.com
www.MintProp.com
CalBRE #01871795

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. mike bitar 08/08/2011 02:33 AM
  2. Chris Ann Cleland 08/14/2011 04:36 PM
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Ambassador
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Jerry Newman
Green Home Realty, 210-789-4216,www.Selling-SanAntonioHomes.com - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Good Morning, Tni. I can tell this new policy with BOA will not set well with many veterans or military members. I am sure many of our veterans groups will take action against BOA for these new policies. If fact, it doesn't set well with me too.

Jul 31, 2011 10:47 AM #16
Rainmaker
869,633
Richard Weeks
Waller Group - Dallas, TX
Realtor, Associate Broker - Manager Business Development

Amazing, and the have the word America as part of their company name. 

Jul 31, 2011 11:09 AM #17
Rainmaker
591,196
Susan Haughton
Long & Foster REALTORS (703) 470-4545 - Alexandria, VA
Your Client-centric Alexandria VA REALTOR

I would go homeless before I would ever allow BOA to finance a mortgage for me...so with that, this does not surprise me one bit.  Massive FAIL for BOA on this one.

Jul 31, 2011 11:43 AM #18
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Chris Ann Cleland
Long & Foster REALTORS®, Manassas, VA - Bristow, VA
Associate Broker, Northern VA

Yet another reason to dislike Bank of America.  And in Northern Virginia, where we have tons of their Short Sale and Foreclosure inventory, we also see tons of VA Buyers. 

Jul 31, 2011 12:26 PM #19
Rainmaker
522,303
Christine Smith
Buyers Brokers Only LLC - www.BuyersBrokersOnly.com - Canton, MA
Exclusive Buyer Agent & Attorney, Canton, MA

I bet most VA buyers don't know this so it's good that you brought it to light.  Somehow it doesn't surprise me.

Jul 31, 2011 10:27 PM #20
Rainmaker
617,844
Deborah Byron Leffler BzyBee Real Estate Lady!
Keller Williams Realty Boise - Nampa, ID

It is so sad...VA buyers really do have it hard in this market...short sales and REO's rarely do repairs in my area....and even if they do the other criteria involved make it very difficult to get financing.  Luckily we are getting a few more "equity" homes on the market....

Aug 01, 2011 10:23 AM #21
Rainmaker
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Tni LeBlanc
Mint Properties, Tni LeBlanc (805) 878-9879 - Santa Maria, CA
JD, MA, REALTOR, CalBRE # 01871795

Century 21 - I agree and they don't have to.

Bob - Yes they do.  Here is an example where they could truly be a leader in the industry and they have adopted a policy that makes home buying harder for veterans. 

Jerry - it doesn't set well with me either.  If only it were a new policy though -- they have been doing this for quite awhile.  And, it is time for that to change.  Why pay for a fancy PR campaign designed to make people think you are doing whatever you can for the market when behind it you have policies like this which are very destructive to real estate markets near military bases?  There is image and there is reality.

Richard - I know.  They need to do some reading on the contribution of the military to America.

Aug 01, 2011 10:39 AM #22
Rainmaker
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Tni LeBlanc
Mint Properties, Tni LeBlanc (805) 878-9879 - Santa Maria, CA
JD, MA, REALTOR, CalBRE # 01871795

Susan - You and me both.  Those parks benches look more attractive than a BofA financed home.  LOL.

Chris Ann - We have a ton here as well. It makes no sense that they be left at the absolute back of the home buying pack due to policies like these.  BofA will refuse allow even $500 of repairs which many times will tank a deal for a VA buyer.  Short sale sellers know this in advance and don't want to touch VA offfers.

Christine - No I don't think they do.  And, I just don't see why anyone would go to them for a VA loan when they have policiies like this in their back pocket.

Deborah - We are too.  I was thinking of writing a blog article about that as well.  We are seeing a return of equity sellers to the market and it is making things much easier.  But, we still have plenty of short sales to go.

Aug 01, 2011 10:45 AM #23
Rainmaker
227,511
Bob Hertzog
Summit Home Consultants - Phoenix, AZ
Designated Broker

As an expert Santa Maria Short Sale Agents, its great to share these information to your homebuyers and sellers. Excellent post Tni!

Aug 03, 2011 10:06 AM #24
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Nestor & Katerina Gasset
International Properties and Investments LLC - Wellington, FL
Realtors, Wellington Florida Homes For Sale

Great post Tni! Sharing your advice as Santa Maria Short Sale Agents will be very helpful to many homebuyers and sellers in your area. Thanks for sharing this!

Aug 03, 2011 10:34 AM #25
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Patricia Kennedy
Evers & Company Real Estate, Inc. - Washington, DC
For Your Home in the Capital

Hey, Tni!  I included this post in Last Week's Favorites.   Have a great Sunday!

Aug 07, 2011 09:32 AM #26
Rainmaker
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Tni LeBlanc
Mint Properties, Tni LeBlanc (805) 878-9879 - Santa Maria, CA
JD, MA, REALTOR, CalBRE # 01871795

Thank you Bob!

Thanks Katerina!

Hi Pat - thanks for the feature!

Aug 07, 2011 11:31 AM #27
Rainer
239,677
Justin Dibbs
United Real Estate - Ashburn, VA
REALTOR® - Ashburn Virginia Homes for Sale

I wouldn't do any business with Bank of America if it could be helped.  I was bummed to learn my new brokerage uses BoA for all their banking ect.  Grrrrrrrrrr.

Aug 07, 2011 06:14 PM #28
Rainmaker
1,253,356
Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents
Lyon Real Estate - Sacramento, CA
Put 40 years of experience to work for you

You've got the same problem with HUD and an FHA short sale. Ever try to get the buyer's 3% closing costs approved on an FHA short sale? Yet, when buying anything but a short sale with FHA financing, HUD will let the buyer add the 3% to the sales price. Of course, FHA is getting squeezed on all sides. From the down payment, to the MI upfront premium, to the loan limit cap. I would not be surprised to see FHA and VA eliminated in the not too distanct future.

Aug 15, 2011 12:49 PM #29
Rainer
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Daniel H. Fisher
www.FisherHermanRealty.com (704) 617-3544 - Charlotte, NC
MCRP - Charlotte Real Estate, NC or SC

Wonder if they will allow an escrow?  On B of A FHA insured loans, we can do an escrow of up to $5,000 to repair appraiser required items post closing.

Aug 21, 2011 03:28 PM #30
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Melissa Zavala
Broadpoint Properties - Escondido, CA
Broker, Escondido Real Estate, San Diego County

I was just stopping by because I notice that you have not posted for awhile. Hope all is well. And, I do agree with Elizabeth (on just about everything) ;-)

Sep 04, 2011 10:09 AM #31
Rainmaker
457,556
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
Destin FL Real Estate

Tni - My area in Northwest Florida has lots of VA buyers.  We are home to large military bases.  I haven't noticed any issues with my VA buyers on BOFA short sales. They typically allow a 3% credit for their closing costs.  Perhaps it's an "area" thing, and you are getting negotiators that just service your part of the country?

Sep 05, 2011 03:34 PM #32
Rainmaker
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Tni LeBlanc
Mint Properties, Tni LeBlanc (805) 878-9879 - Santa Maria, CA
JD, MA, REALTOR, CalBRE # 01871795

Justin - Yes, I'm not a fan either.

Elizabeth - How ridiculous!  That would be awful if they went away. But yes you are right FHA and VA are doing overtime in distressed markets.

Hi Daniel - Sounds like a great solution for FHA.  Do you do the same for VA?

Hi Melissa - Well I had some laptop issues in August.  I bought a Mac awhile back.  It is still in the shop and I finally had to break down and buy an HP.  I should be back up to speed soon.

Hi Wendy - No their position is that they will not pay for repairs and that buyer credits cannot be used for repairs either.  I'm sure people have closed deals using credits -- but their policy is no repairs and credits are not to be used either.  It really puts VA buyers at a disadvantage in distressed markets.

Sep 05, 2011 08:21 PM #33
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Nestor & Katerina Gasset
International Properties and Investments LLC - Wellington, FL
Realtors, Wellington Florida Homes For Sale

Hello Tni,what more can I say this post is defintely a top notch here.Detailed and informative to everyone.Keep up the good work as number one Santa Maria Short Sale Agent. 

Sep 28, 2012 06:46 AM #34
Rainmaker
365,080
Inna Ivchenko
Mannis Real Estate Group - Calabasas, CA
Los Angeles / Valley Homes

Every borrow should shop around and choose who offers the best rates.

Usually, VA-guaranteed loans come with terms that few other financing sources can match: zero down payment; flexible and generous credit underwriting that emphasizes the individual applicant rather than the algorithm-driven computer programs that dominate conventional lending. Also, VA interest rates are competitive and maximum loan amounts are the jumbo range in some areas.

Nov 15, 2014 05:52 PM #35
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