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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  1. mike bitar 08/08/2011 02:33 AM
  2. Chris Ann Cleland 08/14/2011 04:36 PM
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Rainer
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Daniel H. Fisher
MCRP - Charlotte Real Estate, NC or SC
www.FisherHermanRealty.com (704) 617-3544

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.

August 21, 2011 03:28 PM
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Melissa Zavala
Broker, Escondido Real Estate, San Diego County
Broadpoint Properties

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) ;-)

September 04, 2011 10:09 AM
Rainmaker
449,596
Wendy Rulnick
Destin FL Real Estate
Rulnick Realty, Inc.

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?

September 05, 2011 03:34 PM
Rainmaker
385,462
Tni LeBlanc
JD, MA, REALTOR, CalBRE # 01871795
Mint Properties, Tni LeBlanc (805) 878-9879

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.

September 05, 2011 08:21 PM
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Nestor & Katerina Gasset
Realtors, Wellington Florida Homes For Sale
International Properties and Investments LLC

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. 

September 28, 2012 06:46 AM
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Tni LeBlanc

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