Is the Cooperative Short Sale program right for me?
Program goal
A Cooperative Short Sale may help settle your mortgage debt and prevent foreclosure. In addition, you may qualify for financial assistance to help with relocation costs.
With a Cooperative Short Sale, we can determine an appropriate list price and start pursuing approvals before you list the property or receive an offer.
Eligibility
You may be eligible for a Cooperative Short Sale if:
Your loan is owned by Bank of America or other participating investors
You owe more on your house than it's worth
You're experiencing a financial hardship such as reduced income, medical expenses or a divorce and you're no longer able to make payments on your home loan
If you don't meet the eligibility requirements for the Cooperative Short Sale program, it may still be possible to sell your house through a traditional short sale.
If you aren't able to sell your house through a traditional short sale, your next option may be deed in lieu of foreclosure. This allows you to transfer the title or ownership of the property to the owner or servicer of your home loan in order to satisfy your mortgage debt and avoid foreclosure.
Please contact us to review your options.
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. 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 sale of the property must close by the closing date in the short sale agreement. Bank of America reserves the right to change or alter the relocation assistance at any time.
Now that I’m in the process of a Cooperative Short Sale, what’s next?
I've requested a Cooperative Short Sale.
During the call, we'll confirm that you're eligible for this program. You'll need to update us on your current financial situation, and you may need to complete additional documentation. If more forms are needed, we'll send them to you.
Throughout the process, you'll be paired with a Customer Relationship Manager who will answer any questions you may have and help guide you through the steps you'll need to take.
If you don't meet the eligibility requirements for the Cooperative Short Sale program, it may still be possible to sell your house through a traditional short sale.
If you're unable to sell your house through a short sale, your next option may be deed in lieu of foreclosure. This option allows you to transfer the title or ownership of the property to the owner or servicer of your home loan in order to satisfy your mortgage debt and avoid foreclosure. There may be benefits to doing a deed in lieu rather than a foreclosure, so you may want to explore this option.
I'm waiting for approval on a Cooperative Short Sale.
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.
If you have a Bank of America home equity loan or home equity line of credit, we’ll take care of getting approvals for your Cooperative Short Sale request.
If your home equity loan or line of credit is with another lender, you'll have to contact that lender and request a Second Lien Release form. The second lien lender will be required to provide us with the appropriate lien release documentation before any offer can be considered. Speak with a licensed real estate agent about other types of liens that may also need approval in order for you to move forward with your short sale.
We'll also work to determine a recommended list price. You may have heard this referred to as the fair market value.
A valuation of the property will be performed at no charge to you. We'll consider the sale price of other houses of similar size in your neighborhood.
After the valuation, you’ll receive a valuation letter with the recommended list price for the property and your next steps.
I'm trying to find a buyer.
You're required to work with a licensed real estate professional to market and sell your house. We strongly recommend working with a real estate agent experienced in short sales who can help guide you through the process. You won't have to pay the commissions of the real estate agent since the commission will be paid from the sale of the house.
Typically, you'll have up to 120 calendar days to market and sell your house at the price indicated in the valuation letter. During this time, it's important to:
- Work with your agent and show your house to as many buyers as possible
- Keep your house in clean condition
- Make it available for showings to potential buyers at all times
Keep in mind that the higher the offer received, the better the chance of receiving investor (third-party) approval of the short sale.
The short sale must be an arm’s-length market transaction. This means, that it is not permissible to sell the house to a family member or anyone else with whom you have a personal or business relationship.
I've received an offer on my house.
Once you receive an offer, your real estate agent will submit:
- A copy of the executed sales contract and all additional documents
- The buyer's proof of funds or pre-approval or commitment letter on letterhead from the buyer's lender
- An update on the status of any additional liens on the property
After we receive the request to approve the short sale offer from the real estate agent, we'll review the information and get back to you with a decision on the offer within ten business days.
For your short sale to be completed successfully, your agent must:
- Submit any requested documents on time
- Respond quickly to any counteroffers you receive
The offer on my house was accepted.
If we accept the offer, we'll provide you with an approval letter listing our requirements to complete the sale. You'll also receive:
- A letter outlining the details of the sale of your house
- A set of documents that must be signed, notarized and returned to us
In order to complete the sale, we must receive all documents by the deadline that we provided in your approval letter.
At the closing, you'll receive $2,5001 to help with moving, rental and other relocation expenses. For tax purposes, relocation assistance paid at closing is considered income. Please consult a tax advisor for more information on how this could affect you.
Once the sale is finalized, your mortgage and any other loans against the house are settled from the proceeds of the sale. As with the sale of any house, unless otherwise negotiated, you'll need to move out by the closing date.
We'll report the sale to the major credit reporting agencies as completed for less than the amount owed. Learn more about the potential effect of a Cooperative Short Sale on your credit.
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. 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 sale of the property must close by the closing date in the short sale agreement. Bank of America reserves the right to change or alter the relocation assistance at any time.
