Lending Processing Services (LPS) reports that the number of homes short sales in the United States exceeded Bank of America foreclosures, and foreclosed homes transactions of other lenders. It seem lenders have finally become more open to selling homes for less than the amount owed on their mortgages. In short sale transactions, the lender releases the borrower from the obligation to pay the deficiency. With 11 to 12.5 million homeowners saddled with underwater mortgages, the number of short sale transactions will the likely con the huge inventory of delinquent mortgages entering the foreclosures process.
Bank of America had more than 5,200 short sales in January 2012. JP Morgan Chase and Wells Fargo rank second and third behind, Bank of America foreclosures, for short sale approvals, have 2,976 and 2,788 homes short sales, respectively. LPS reported that 23.9 percent of home sales in January consisted of home short sales. Foreclosed homes sales accounted for 17.7 percent of home sale transactions.
Bank of America Avoid Deeper Losses
Lenders like Bank of America have approved more short sales to minimize losses from home prices depreciation. Home values have declined an average of 35 percent from peak prices attained in July 2006, according to the S&P Case-Shiller Housing Price Index. During the same period in 2011, Bank of America and other lenders did not approve as many short sales comprising 16.3 percent of homes sale transactions. Bank of America foreclosures, countrywide foreclosures and other foreclosed homes deals made up 24.9 percent of sales. LPS says short sales outpaced foreclosure transactions for the first time in November 2011.
Several years ago, Bank of America had a well deserved reputation with short sale agents- when it came to dealing with mortgages originated by Bank of America or loans inherited as a result of buying Countrywide in 2008. Bank of America ended up with the Countrywide foreclosures and many severely delinquent mortgages in danger of default. Many of these loans have since become part of the overall inventory of Bank of America foreclosures.
Complaints of lost paperwork, refusal to respond, closed files and countless delays were constantly hurled at Bank of America that the institution contracted short sales processing to a hired a third -party firm. The bank has turned it reputation around with many agents and cut approval time for short sale transaction to 30 to 60 days.
Buying Short Sales
Homebuyers and foreclosure investors who prefer to deal with homeowners in pre foreclosures can add Bank of America short sales to their arsenal for investing in foreclosed homes. As you do for other foreclosed homes purchase, complete the necessary homework on Bank of America short sale candidates.
The homework includes completing a title search, determining if the loan is in the Bank of America foreclosures pipeline and finding out the remaining balance on the mortgage. Even if the seller accepts your offer, Bank of America must give any short sale deal its approval. Remember that Bank of America foreclosures and Countywide foreclosures also offer homebuyers and investors an opportunity to purchased foreclosed homes at wholesale prices from REO properties.