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Posted over 14 years ago

Bank of America Creates its Own Back-Log

Short Sales are all I do.  In the current pipeline of property files that we are negotiating, about 10 or so are Bank of America, formerly Countrywide loans.  It used to be that when you faxed in the complete short sale package, it would take 3-5 business days for the imaging department to upload the documents so that the representative I would talk to on the phone, a few days later, could see them.  Once uploaded, the file would be assigned to a Loss Mitigator for review, and a Broker’s Price Opinion of the property would be ordered by that Loss Mitigator.  The results of the BPO would get to the lender about 5 -7 days later, THEN we could “talk turkey” about the deal.  If the offer was too low, the Loss Mitigator would notate the file so the representative on the phone would be able to tell us that it was too low, and usually there would also be a note in there about the amount of the counter-offer as well.  With this information, we could go back to the buyer and get their response to the counter-offer, send it in, and repeat….until a deal was reached.  Even though this process could be frustrating at times, at least we were communicating and moving forward.

Then someone at BofA got a bright idea…..

The idea is that since Loss Mitigators often have hundreds of files to work on at once, they don’t have time to hold files open waiting for counter-offers and reply to communications from either the Listing Agent handling the Short Sale, or the 3rd Pary Loss Mitigation company like mine.  So now, if the offer comes in too low, and this is where the brilliance comes through, LET’S JUST CLOSE THE FILE.  After all, if we close it, then our Loss Mitigator can move on to another one and won’t have to “waste time” waiting for a response to the counter.  We’ll just tell the Agents and 3rd Party Loss Mitigation companies that the offer was too low and to resubmit when they have a better offer…..and yes, in most cases, RESUBMIT THE WHOLE FILE, financials and all!

OK, wait a minute.  Isn’t the number ONE reason people hate short sales, and by people I mean realtors, buyers, title companies, and even lenders, is because THEY TAKE TOO LONG???  Well, now instead of the imaging of documents taking 3-5 business days, which is slow by even Wells Fargo’s current standards of almost SAME-DAY upload times, Bank of America’s imaging backlog stands at 13 BUSINESS DAYS!!  Yes, 3 weeks on the calendar to just see the documents.  So I asked my 7 year old for clarification, “Son, which is longer, 3 days or 3 weeks??”, and he appropriately responded, “Come on Dad, 3 weeks, of course.”  Wow, and I thought Bank of America had something on me for a minute there.

So let’s dig deeper.  Lenders are absolutely struggling to get out from under the vast number of foreclosures while saving as much face as possible.  There are more and more buyers in the market each month trying to buy property (a good thing), partly driven by the $8k tax credit (another good thing). Interest rates are low (again, good).  The variety of mortgage products is good too, etc. etc.  These facts and many others currently exist to help clean up the mess.  While some lenders, Wells Fargo for example, have figured out that efficient document receipt leads to quicker set-up, which leads to quicker analysis, which leads to more buyers “hanging in there” to reach the closing table, others like Bank of America have figured out that it’s just more important to keep the Loss Mitigators working on “fresh” files, completely ignoring the useless bottleneck of document resubmission in their fax/imaging department.  In fact, the backlog is treated so matter-of-fact by representatives of Bank of America, that I think they are really believe this is the new “norm” in the short sale world.  Their stance is “we are overloaded, and if the buyer wants the property, they’ll just have to wait for our process to run it’s course.  After all, we’re losing money.” 

No dah, and they’re now going to lose even more!

Need I even explain that this type of needless backlog creates all kinds of problems?  It makes it more difficult to hang on to buyers, heck why would they wait 5 months to close on a house when they can spend $5k or $10k more and be in one down the street in 45 days?  After all, at today’s rates what’s gonna be the difference in their payment, $50/mo?….well worth it to avoid the waiting.  It makes it more expensive for the lender to close the deal due to accruing property taxes, unpaid interest, not to mention the decline in value of the home, especially if it’s sitting vacant.  In addition, the Loss Mitigators, although the “new idea” was masterminded to make them more efficient, have just been forced to be LESS efficient, being reassigned to new files each week.  With every new file, they start from scratch, ordering BPO’s, calculating the deal, etc. while the “low-offer files” fall off, ultimately resulting in less closings for them on any given month.  And, by the way, don’t most of them earn a bonus based on the number of deals closed each month.  Hmm, so they just took a pay cut too!  Fabulous!  That will make them even MORE pleasant to talk to, increasing the overall perception of customer servicetoo at Bank of America, killing two birds with one stone!  Way to go!

So, at Short Sale Monkey, we’ll likely close all of our Wells Fargo, Aurora, Carrington, Chase, and Ocwen deals that we just started working on this month and last, WELL ahead of our Bank of America files.  In fact, I just changed our company projected time line for Bank of America closings………Summer, 2010.  I wonder if the buyers on these properties should go ahead and order their inspections now?  Just a thought.

It’s a Jungle Out There…..Call the Monkey!!


Comments (4)

  1. Put an offer in on a bofa shot sale on sept 18th 2009,found out today nov 10th 2009 that the bpo came in good and woud be assigned to a negotiator in the next 5 to 10 days,Are we geting close yet? sure hope so!!! how much longer???


  2. Thanks for the posts, James and William! We have made the decision to not take on BofA short sales any longer, at least until they get their act together. (They have just launched a web-based interface in which realtors are to key in all the info regardging the file, and upload the docs manually there for them. They claim that this will allow for a 2 WEEK approval! Yeah, right. I'll believe it when I see it. AND, they have no ability for a 3rd party company like mine to enter the data since they require the entry of your realtor's license to begin! ) They just don't get it!


  3. Great post! I like you specialize in Short Sales. So with the backlog it only leaves any of us with two(2) options. 1) Simply do not do business with BofA. or 2) Play the game. We for a very long time opted for the first option. But with the amount of files that we are now negotiating for "other" investors we have had to work the BofA files.


  4. Brilliant and spot on. Currently trying to purchase a short sale from bank of america. Submitted offer 3 weeks ago with no response from the seller's lender. The seller signed off on the contract 3 weeks ago and have not heard a peep from the bank. Apparently, I am the third such buyer who has tried to purchase this home going into foreclosure with all previous prospective buyers walking away from the deal. Currently, thinking about buying land and building my home myself if this takes any longer.