But yesterday Bank of America made it easier for a short sale to be completed, from the article:
Until a month ago, B of A and its Countrywide Financial Corp. had required that 10% of a home's sale price go toward paying off home equity lines of credit before they could agree to a short sale. But Terry Francisco, a spokesman for the Charlotte company, said Monday that it changed its policy last month, agreeing to accept 5% of the sale price when there is no equity available to holders of the first or second liens.
The new policy "is based on the assumption that it is in the best interest of all parties involved to accept a short sale, as opposed to proceeding to a foreclosure," Francisco said. "We believed that the previous policies set an arbitrary amount that did not take into account the savings derived from proceeding with a short sale."
B of A expects the change to increase the number of short sales, he said, and even though it is releasing the liens, it reserves the right to pursue deficiency judgments against borrowers.
With foreclosure moratoriums being lifted in the past month, bankers are looking for ways to deal with an anticipated flood of distressed properties and are trying to determine which borrowers will get loan modifications and which will go into foreclosure.
The whole article is excellent regarding the issues facing short sellers and why they aren't closing. I thought the banks would get on the short sale bandwagon a bit sooner because the banking system will net more and the crisis will be over sooner by short circuiting the foreclosure process.
