Facing foreclosure? Are you working with a distressed property? Have you tried to do a loan modification but you don’t qualify? — with both a and a retail branch right here on Mercer Island — has stepped forward to try and improve the situation.
The Charlotte, NC-based bank is working to find common ground between buyers, sellers and Realtors by making the origination process, a key step in the purchase of a home, more transparent.
Trying to sell a distressed home, either as a short-sale or a foreclosure, has not been easy. Big banks have been inundated with contracts. The number of contracts combined with insufficient staff and uncertain processes for Realtors, buyers and sellers have caused long delays and failed contracts
Matt Vernon, a Bank of America executive, in a meeting with the National Association of Realtors, explained that the bank has finally realized that it must change its business model to meet the demands of their customers and help stabilize the market.
The goal is to get the right people in place to handle the process quickly and efficiently providing for a good customer experience. But, just having more staff will not alleviate the problems. The bank also knows that it must redesign the origination process. It has set some guidelines in motion to accomplish just that.
According to Mr. Vernon, the bank’s core strategy is shifting from refinance to a more dedicated buying side. He is predicting a rise in short sales and the bank must be in a position to handle the volume and protect the interests of the bank as well as their customers.
On April 14, 2012, Bank of America initiated new procedures for completing a short sale transaction. The online transaction system has been designed for communication between borrowers and their advisors reducing time and enabling the bank to perform underwriting tasks at the same time that agents are collecting the necessary information and paperwork. The system is designed to make the origination process transparent.
The online system, Equator, establishes a single point of contact. All contact is through Equator eliminating the frustration of no return calls and different answers from different people. All questions must be answered within 2 days. This isn’t instant, but at least this is a huge improvement.
A home loan guide is available which walks through the origination process step by step and gives everyone a better understanding of what needs to happen for a successful close. Realtors should take advantage of the information to help their clients and prevent unnecessary frustration.
When loan modification is not possible on a distressed property and a short sale is the option, Bank of America is providing transition funding. The short sale must be initiated by the end of this year and closed by the end of 2013. Not all short sales qualify so you must contact the bank or check out the web site for explanation and guidelines.
There have been many horror stories about lost paperwork, delays and uncertainty. Buyers have been put off from making offers on short sales because of fear of a 9 month close and the need to get on with their plans. Will the Bank of America’s Equator process eliminate all problems? That doesn’t seem possible, but at least the bank finally understands how their actions affect their customers and what their inability to act is doing to their bottom line.