Is a short sale right for me?
If you're concerned that your house may go into foreclosure and you haven't qualified for alternatives that would let you keep the property, consider a traditional short sale, where you sell the property for less than you owe.
You may be eligible for a traditional short sale if:
You're experiencing a financial hardship, such as reduced income, medical expenses or divorce
You owe more on the property than it's worth
You're unable to afford your current monthly mortgage payment
You're unable to modify your current home loan
You don't have prior approval from us to pursue a short sale
You've received an offer on the property
How do I get started with a short sale?
Now that I'm in the process, what's next?
I'm trying to find a buyer.
In a traditional short sale, you market the property and receive an offer before you contact us.
If you haven't received an offer yet, please be aware that you're required to work with a licensed real estate professional to market and sell the property. We strongly recommend working with a real estate agent who's experienced in short sales and who can help guide you through the process. You won't have to pay the cost of the real estate agent since they'll be paid from the sale of the house.
I've received an offer on my house.
Before any offer can be considered, we'll need to receive a completed Second Lien Release letter for any home equity loan, lines of credit or other debts against the property. The closing can only take place after we receive the letter.
If you have a Bank of America home equity loan or line of credit, we'll take care of completing the required Second Lien Release letter.
If the second lien is with another lender, you'll have to contact that lender and request a Second Lien Release letter. The lender needs to provide this letter, sign it to indicate that they approve of the offer, and send it to you.
If you receive an offer, your agent will need to submit the offer to us.
I need to request a traditional short sale.
Before you call, to save time, please gather the following information that we'll be asking for:
- Loan and property information
- Information on any foreclosure notices or dates you've received
- Details of the offer and a copy of the signed purchase contract
- Information on any home equity loan or line of credit on the property, if applicable
- Information on a loan modification, if you were considered for one
- Details about your financial hardship
When you call, we may verify that there are no other options available that would allow you to keep the property.
I'm waiting for approval on the offer I submitted.
We'll complete the evaluation process, reach a decision and get back to you in approximately 30 calendar days after your real estate agent has submitted the offer to us. During that time, we'll work to gain approvals. Even if you’re pursuing a short sale with us, in most cases there’s a third party, known as the investor, who has ownership of the loan. We’ll need their approval in order to finalize the short sale.
We'll also work to determine the fair market value of the property. A professional appraiser will perform a valuation of the property at no charge to you. He or she will consider the sale price of other houses of similar size in your neighborhood.
Once the fair market value is determined, we may make a counteroffer. It's not unusual for potential buyers to withdraw offers all the way up until the closing, so during this time, we encourage you to continue marketing the property.
When all necessary parties have accepted the offer, we'll provide you with an approval letter releasing the house for purchase.
The offer has been accepted.
Final documents will be prepared and your agent will help you set a closing date.
After the closing, the sale of the property is complete.
Important: Depending on who owns the loan, if the funds from your traditional short sale don't cover the amount owed on your loan, you may be responsible for paying the difference (also known as the deficiency).
Home Loan Assistance Frequently Asked Questions
The short answer is yes. But before you consider a short sale, there are many other options to explore. For example, refinancing or modifying your home loan payments may allow you to stay in your house with more affordable mortgage payments. Call one of our specialists to help determine other options for which you may qualify. They'll work with you to help you determine your best course of action.
Depending on your loan and circumstances, it may be possible. Please call us to discuss your options.
You may search a list of real estate agents in your area to find one who has successfully completed short sales with us in the past, or you may decide to hire another agent.
No. However, qualified homeowners may be eligible for relocation assistance1 through the Home Affordable Foreclosure Alternatives program and the Cooperative Short Sale program. In these federal government-sponsored programs, homeowners work with us prior to putting the property on the market. If you appear to be eligible, we'll mail you information on how to participate in one of the programs.
Because of the number of people and amount of paperwork involved in a short sale, it can take longer than a traditional home sale. Typically it takes up to 90 calendar days after the initial offer is accepted to finalize, although timelines can vary based upon current market conditions and your particular circumstances.
If a short sale is completed on your property, we'll report that your loan was "paid in full for less than the full balance." Learn more about the potential effect of a short sale on your credit.
You should contact a tax professional to gain an understanding of any tax implications.
If we're unable to get approvals from all the necessary parties, a deed in lieu of foreclosure may be available to you. With a deed in lieu of foreclosure, you agree to transfer the title or ownership of your property to the owner or servicer of your loan in order to avoid foreclosure sale and satisfy all or a portion of the mortgage debt. The amount of debt satisfied by this transfer of ownership is based on the approved value of your home. In some cases, you may be responsible for a remaining balance of the mortgage debt over and above the approved value. A deed in lieu generally takes less time to complete than a foreclosure, so your reported delinquency could be shorter than it would with a foreclosure.
You should contact a tax professional to gain an understanding of any tax implications.
A loan can be transferred to a different servicer while in the process of a short sale. You may hear this referred to as a service release. A loan servicer sends your loan statements, collects your monthly payments (principal, interest, taxes and insurance) and handles other aspects of your loan. You'll be notified at least 15 calendar days in advance if your loan is going to be transferred. Your new servicer will be aware of your short sale status and should have received all of your documents from us. You should continue to work with the new servicer to complete the process you've started or to determine which programs may be most helpful in your current situation.
If you were denied home loan assistance, such as a request for a loan modification, short sale or deed in lieu you may be able to dispute the decision. You can file an escalated case with us if you have reason to believe any of the following are true:
- You met all the criteria for home loan assistance but were not properly evaluated for assistance or were improperly denied assistance. This may include:
- You did not receive adequate notice from us about your foreclosure alternatives
- You were not given appropriate time to respond to communications from us during your loan review process
- Your loan was referred to foreclosure prematurely, or we did not suspend foreclosure activities when we were required to do so
You can also file an escalated case if either of these two specific concerns apply to your loan:
- You have a reasonable belief that your mortgage loan is being serviced in a fraudulent manner
- You have retained a lawyer to help you resolve a mortgage dispute with Bank of America
If you have reason to believe that any of the above apply in connection with your loan review and affected your eligibility for home loan assistance, you may file an escalated case with us to review your concerns.
Please note that inquiries about a pending request for home loan assistance or general questions about the servicing of your mortgage do not meet the requirements for an escalated case. For general servicing questions, please call 1.800.669.6607 (Monday-Friday, 7 a.m.-7 p.m. local time).
To file an escalated case, you or any third party representing you, such as a housing counselor or attorney, should send us a brief letter describing the specific reasons you believe one of the above scenarios applies to your loan or to your application for home loan assistance. If you are represented by an attorney, please have your lawyer submit this request on your behalf.
Escalated case requests must be sent by mail to the following address:
- Bank of America Corporate Center
Attn: BAC Escalated Case Unit
P.O. Box 940508
Simi Valley, CA 93094-0508
Please note that if a third party, such as an advisor or a nonprofit advocate, contacts us to submit an escalated case on your behalf, we must have your written authorization before we can communicate with them about you or your loan. Without your written authorization, we will not be able to discuss your home loan with them. We can provide you with an authorization form upon request.
What to expect after submitting your request
Within three business days after receipt:
- If your submission meets the requirements for an escalated case, within three business days of the receipt of your request, we will send you a written acknowledgement that we have received your request. This acknowledgement will also include the estimated date by which your escalated case should be resolved, along with a toll-free number for the Escalated Case Unit.
Within 15 calendar days after receipt:
- In most cases, within 15 calendar days of receiving your request, we will mail you a written response describing the proposed resolution of your request and any next steps to be followed by you or by us. If your matter cannot be resolved within 15 calendar days, we will notify you of the delay and give you a new estimated resolution date. This new estimated resolution date, in most cases, will be no longer than 30 calendar days from the date we received your original escalated case.
Checking the status of your escalated case
Your written confirmation will include a toll-free number you can call for information about your escalated case.
1 The relocation assistance payment is calculated based on the appraised value of your property and the program rules. The total amount will be no less than $2,500, but no more than $30,000. The payment will be delivered after the closing if you comply with all terms and conditions of the program, which include but are not limited to the following: a valuation of the property must be completed and you must satisfy all subordinate liens and provide clear title for the property. If you are still responsible for a deficiency balance after the sale, you should be aware that this relocation assistance will increase that deficiency since it reduces the amount available to apply towards your mortgage debt. If you do not comply with all terms and conditions of the program, you will not receive the relocation assistance payment. The amount of any relocation assistance will be reported to the Internal Revenue Service (IRS) on the appropriate 1099 Form or Forms. We suggest that you contact the IRS or your tax preparer to determine if you have any tax liability. In order to receive the relocation assistance, the short sale must close by April 30, 2014. Bank of America reserves the right to change or alter the relocation assistance at any time.