B of A Leads Foreclosure Solutions
Tuesday, December 8, 2009
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Last month BofA chose to work with REOtrans, a leading transaction vendor to the mortgage industry, to advance and streamline foreclosure solutions by reducing them all together.
They are working to move the short sale idea into the mainstream RE sale arena. This is great news no matter what side of the Real Estate market you find yourself standing in.
The traditional Short Sale process has led to immense frustration and outright anger, not only here in California, but throughout the nation for all parties involved. As a Real Estate professional, having to negotiate short sales on behalf of distressed homeowners, I have learned that many people charged with Short Sale approvals agree…the short sale process, as it is implemented now, is ridiculous even archaic.
B of A has been the penultimate banking institution in the United States for decades and it goes without saying their agreement to work with REOtrans is a window into Real Estate sales for the near term.
The strategy for B of A is to streamline this otherwise frustrating process of selling a home when it is worth far less than is owed. This agreement will affect in the market in two ways, one good, immediately and one not so over time.
The good side is simple…Distressed homeowners will sell their nonperforming asset and cut their losses. Similar to a stop loss order often used by stock market investors. In Real Estate it does exactly the same thing. Availability of affordable homes will increase demand over time. This action will increases supply and lead to more buyer opportunities.
Uh Oh! Another bubble? Maybe.
Over time, The “not so good” applies to the buyer’s market (the bubble?). When the affordable opportunities become more in demand and prices start the natural course of creeping up from the bottom. Supply and Demand! We have seen some instances where this is already happening.
BofA understands they have lost Billions in their inability to mitigate all the losses the Countrywide purchase has bestowed upon them. Who’s fault is that anyway?
I realized this almost 2 years ago. A buyer found a home available that was a short sale (WaMu) and we offered $630K and the short sale was not approved. WaMu foreclosed on the owners and had to sell for a $180K a loss. Terrible!
Diana Olick CNBC Real Estate reporter exclaims…”What I have found is that the foreclosure process is so convoluted..”
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[...] the current cycle’s peak in July 2007. What a steep slide. It’s true that more streamlined Short Sale process will balance the severely discounted REO closings to help further the trend [...]