Short Sales Moving Into Mainstream

It’s news to many that Bank of America has completed more short sales every month than foreclosure sales every month in the last year and a half. In May alone, B of A completed 9000 short sales, while only completing 7000 foreclosure sales.

With the introduction of HAFA, the Home Affordable Foreclosure Alternatives program in April 2010, lenders received their first guidelines for handling short sale transactions. They’re now finding it easier and faster to collect hardship documentation and transactions are moving faster. Bank of America completed 95,000 short sales in 2010.

Citigroup says that they’re average short sale transaction is being completed within 83 days when it used to take 120 days. There have been some problems however with appraisals coming in that do not support offers that were expected to go through, especially when the offer price was at the listing price. Banks are encouraging real estate agents to send in their own BPOs, Broker Price Opinions, to support their offers and hopefully help the banks to reconcile offers with appraisals.

In a major change, banks are now actually providing “warm” short sales leads to real estate agents. Instead of agents calling homeowners offering short sale services, banks are supplying agents with leads to contact homeowners who are delinquent and who have expressed a willingness to participate in a short sale.

Some banks are actually calling homeowners to discuss short sale, and if the owner is willing to go down that trail, they are providing their information to real estate agents, or they are referring short sale specialist agents to the owners.