Do Kansas City Homeowners who are facing a Bank of America understand their new Cooperative Short Sale Program?

Do Kansas City Homeowners who are facing a Bank of America understand their new Cooperative Short Sale Program? 


Just as the short sale process was getting its kinks worked out, Bank of America throws a HUGE wrench into the short sale process. 


First, Kansas handles their foreclosures through the judicial courts so the new guidelines will affect Kansas differently then other states, like Missouri. 


Bank of America has started a new Bank of America's Cooperative Short Sale Program. On the surface it looks very good. They first send out a detailed acknowledgment letter explaining their new short sale program.


In the letter, sent by Bank of America, the front page is very similar to the steps of a normal short sale. The second page is very informative. I even like their short sale disclosures. 


The part of the new Bank of America Short Sale Program I dislike is in order for a distressed homeowner to be accepted into the new short sale program they must agree to a Deed in Lieu of Foreclosure at the 121 day mark if the property is not sold. 


That is right. The homeowners who are facing foreclosure and decide to go the short sale route may actually make the foreclosure process much easier for the bank to take back the property. 


A typical Kansas City home is on the market longer than 120 days. In some areas like Gardner, KS. the median days on the market is 200 days. Short sales are typically on the market longer than a typical home. Bank of America who to this point as been totally honest and swift in negotiating short sales with distressed homeowners will not agree to start the new short sale process unless the homeowner agrees to give back the home in 121 days. Hmm  . . . I would suggest consulting an attorney before agreeing to the new terms.


In Kansas, a homeowner can legally stay in the home during the normal foreclosure process a minimum of 7 months. With an attorney, lengthen the process to a year minimum. I have even seen some homeowners stay in their homes 27+ months. 


Why would a Kansas distressed homeowner agree to the new Bank of America short sale guidelines upfront without a contract when it is taking 4+ months to sell an average short sale?



Think about it . . . What happens if the buyer backs out of the contract on the 115 day mark because they think they can get a better deal if the home went back to the bank. I have seen this happen many times. Especially with real estate investors and wish washy buyers. The homeowner will be royally screwed by losing their home with the Deed in Lieu of Foreclosure clause.


Lets say the home buyer wants to renegotiate the contract hours before closing. If the seller doesn't give in, they lose their home with the Deed in Lieu of Foreclosure clause. 


I think you get the idea. There are many ways that the home buyer will have the upper hand in negotiating. I have seen to many home buyers pull stunts the last minute and everyone leaves upset and the homeowner loses everything.


The new guidelines will slow down the pre-approval process of Bank of America's Short Sale Program.


If a homeowner does not agree to the new short sale program, they will not be eligible for relocation expenses and the streamlined short sale processing according to Bank of America.


I know there are other differences, but these are the main ones. Before accepting the new terms, I would recommend consulting an attorney. The terms are to fictional and I don't see them working out for the homeowner. 




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Blog post written by the Dowell Taggart Team of RE/MAX Premier Realty 

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