Why would Bank of America issue a denial for your Fannie Mae Cooperative Short Sale? It might astonish you to learn that not every Bank of America loan will qualify for the Cooperative Short Sale process simply because your home is underwater and the investor is Fannie Mae. Moreover, at any time in the short sale process, even if you’ve signed a Borrower Acknowledgement of Interest, Bank of America can still yank out that rug from under you. As a Sacramento short sale agent, you would not believe the things I witness first hand. But then, I close a lot of Bank of America Cooperative Short Sales in Sacramento. Sooner or later, I’m bound to see a lot of crap.
Just last week, I accepted a counter offer in Equator for a Bank of America Fannie Mae Cooperative Short Sale. Typically, this is the point in the short sale when, shortly thereafter, the approval letter arrives. I thought the short sale was finished and we were about to close. Nope, next thing I discovered Bank of America denied the Cooperative because, low and behold, Fannie Mae released Bank of America as a servicer. Now, Fannie Mae has supported Cooperative Short Sales at Bank of America in the past. This was an odd move, from where I sit. So, since Bank of America was no longer the servicer, the short sale will have to start over through the new servicer, which is no stranger to short sales, Seterus. Don’t even get me started on Seterus. That’s another blog.
In another Fannie Mae Cooperative Short Sale, we have a problem with the second lender, which won’t back down to Fannie Mae’s demands. This is another file in which Fannie Mae is about to release Bank of America as the servicer and hand over the file to somebody else. Why is Fannie Mae dumping these Bank of America files? One would think that files in the middle of a short sale would receive some kind of priority. In any case, this is one reason your Bank of America Cooperative Short Sale could be denied — because Bank of America is no longer the servicer.
It’s just been the last 30 days in which I’ve noticed a change in the Fannie Mae Cooperative Short Sales at Bank of America. Generally, Fannie Mae will authorize a higher payment for the relocation incentive than a traditional Cooperative Short Sale, which is $3,000 vs $2,500. Then, if you get the HIN Incentive, that could bump up the cash payment tremendously. I have some clients who qualify for both incentives and are getting paid $15,000 or so.
On the other hand, the other GSE, Freddie Mac, does not participate in Bank of America’s Cooperative Short Sale. You would think whatever guidelines Fannie Mae comes up with would be followed by Freddie Mac, but it doesn’t always work that way. It doesn’t work that way in a HAFA short sale. A Freddie Mac HAFA short sale is very different from a Fannie Mae HAFA. This means if your loan is held by Freddie Mac and serviced through Bank of America, you cannot qualify for a Cooperative Short Sale.
I discovered an Elk Grove short sale would not qualify for a Cooperative as well because the investor was Aurora. The homeowner thought that Bank of America was the investor. Morever, Aurora says it has a policy that if the homeowner has filed for bankruptcy and completed a bankruptcy, it won’t let the homeowners participate in HAFA. The devil is in the details. The devil is always in the details, which is why it’s a good idea to hire a Sacramento short sale agent with experience. Why take a chance on a denial letter for your short sale?
And be careful if you’re trying to pursue a Cooperative Short Sale through Bank of America in which Fannie Mae is the investor. Although, this is only a few short sales in which Fannie Mae has released Bank of America as the servicer, it could be the initiation of a new policy. Even scarier is the fact there is a huge profitable market for buying and / or insuring bad loans. Not much has really changed, you know. But that’s a blog for another day.