Bullshit, Bullshit, Bullshit
October 8, 2011 Leave a comment
B of A is offering up cash incentives for people to take short sales on their under water property. If you’re like me, that sentence just made you gloss over like you flung open a technical manual on the hydraulics involved in power steering on a big rig. Here’s what I mean: if you own a house, and you owe more on the mortgage (more on the loan you took out in order to purchase the home) than the home is currently worth (after 2008 the appraised value of houses plummeted, so when you took out the mortgage in 2006 on a home appraised at 300k, you’re paying a loan on a 300k home and today that home may only be worth 170k).
I can tell you now as a foreclosure monkey, I have never seen B of A, or any bank, make it easy to get short sales done. And at least the body of the article coughs up some of that honesty. You need additional paperwork certifying loan deficiency, you need B of A approval, you need to qualify in terms of the costs of the home and how much B of A stands to lose versus throwing you into foreclosure, etc. And on top of that, there actually has to be a buyer interested in purchasing your under water property. Simple, right? I smell disingenuous marketing strategy by B of A, this isn’t a sincere program at all. At the best, its a desperate attempt for B of A to clear bad loans off their books and then shrug that “well, there just aren’t any buyers to help us out, so see, we have to throw all these people into foreclosure and clog the legal system and hire foreclosure factory law firms to process our junk mortgage defaults”.
What’s in it for Bank of America? It saves attorney fees, court costs and property taxes by avoiding foreclosure. It also speeds the process of getting bad loans off its books and gets the properties back on the market faster.
And more cynically, B of A gets this bonus:
The cash payouts give homeowners a reason not to trash their homes or strip them bare before moving out. When houses enter foreclosure, homeowners can essentially live for free until banks take possession at the end of the court process, which takes an average of nearly two years in Florida.