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bank of america

New Bank of America Short Sale program helps Orange County Home Owners

by vbindi on August 19, 2010

Bank of America is now starting a new short sale program that will target certain homeowners, in the hard hit states of  California, Florida, Arizona and Nevada, according to a top level B of A official.  In this new program, B of A  will pre-screen home owners who have been considered for a modification under the Home Affordable Modification Program (HAMP) and a short sale under the Home Affordable Foreclosure Alternatives (HAFA) program.  And these borowers have either fallen out of  these programs or were declined during the qualification process.

Bank of America states that the purpose of this program is give these home owners a better alternative, then foreclosure. They intend to provide a custom program with incentives that are attractive to homeowners experiencing a true hardship.  This type of proactive response will help to bring stability to the beleaguered Orange County housing market.  This new test short sale program, was developed to streamline the process.  In that regard,  B of A will use the previous documents that the home owner had submitted, so that no new documents are needed from the prospective seller. 

One of the very important beneifts of this new Bank of America short sale program, is that they will be waiving deficiencies, which is the difference between what the home sells for and how much is left on the mortgage.  This is a huge benefit to any Orange County home owner who may be contemplating a short sale with a Bank of America loan.  Another beneficial feature of this new short sale program, is the B of A will offer the seller a $3,000 relocation fee, for cooperating with the short sale.  If  the property does not sell, then B of A will consider a deed-in-lieu of foreclosure in order to satisfy the mortgage.

B of A will not be selecting which real estate agent to work with, therefore it is advised that a homeowner work with a certifeid and experienced short sale realtor.  B of A will assign a short sale specialist to work with the real estate agent and the homeowner to market the property for 120 days.  Letters have already been mailed to qualified homeowners, and this will be a six month trial program. 

One of the major stumbling blocks to getting short sales approved, is that the for many loans, the beneficiary is some other investment institution other than Bank of America, and it is often difficult for B of A to get that investors approval in time to meet the time lines of a purchase offer.  In this test program, B of A has worked with the investor before hand, to get their preliminary approval so that the short sale can close faster.

There is great need for short sales at this time.  Freddie Mac recently reported that its short sale figures were up 600% from two years ago and said it had completed 22,117 short sales in the first half of 2010, up nearly 180% from 7,914 in the first half of 2009.  In addition, a research firm named Core Logic, has reported taht short sales in the US have tripled since 2008. In addition,   Bank of America has completed more than 25,000 short sales to date.  B of A is committed to improving the short sale process, and test for new ways of completing short sales to help their  customers avoid foreclosure with a dignified exit.

For more inforamtion or questions about short sales in Orange County, HAFA short sales, or the new Bank of America short sale program, feel free to contact the short sale experts at ShortSalesASAP.com  or email us at:  Info@ShortSalesASAP.com

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Countrywide In Large Subprime Settlement

by vbindi on July 20, 2010

Countrywide is paying the biggest tab yet in settling a subprime class action suit.

And like it or not, the deal brings a rare bit of good news for some embattled former executives of the troubled mortgage lender, including longtime CEO Angelo Mozilo.

A federal judge signed off Monday on a settlement under which former shareholders of the troubled mortgage will get $624 million, the Los Angeles Times reported. The plaintiff lawyers called the sum the largest shareholder settlement since the mortgage meltdown started in 2007.

The company didn’t admit to any wrongdoing. “Countrywide denies all allegations of wrongdoing and any liability under the federal securities laws,”  a spokeswoman writes. “We agreed to the settlement to avoid the additional expense and uncertainty associated with continued litigation.”

But shareholders led by a group of New York pension funds say they were ripped off when Countrywide failed to inform them of its growing dealings in low-quality loans.

“Countrywide’s actions have improperly enriched executives at the expense of shareholders,” New York City Comptroller John C. Liu, who serves as a trustee of some of the plaintiff pension funds, said in May when a preliminary deal was reached. “This historic settlement sends a strong message that this behavior is unacceptable in Corporate America, and that management will be held accountable to shareholders, especially when they put self-interest before shareholders’ interests.”

But how strong is the message when all the payments will be made by Countrywide’s owner and its auditor? Not a penny will be paid by the executives and directors who were at the helm when the company plunged head-on into the business of lending to riskier customers.

Bank of America, which acquired the mortgage lender two years ago and has since stopped using the Countrywide name, will pay $600 million and accounting firm KPMG will pay $24 million.

The Countrywide settlement comes just days after officers and directors in another big subprime class action agreed to pay $90 million to settle claims in that case. New Century co-founder Brad Morrice said then that he hoped the settlement “would make up for some of the losses suffered and provide closure to me and the shareholders.”

Closure isn’t coming any time soon for Countrywide. Bank of America’s annual report provides a list of legal cases tied to Countrywide that covers parts of three pages.

Nor is Mozilo out of the woods. He and two other former Countrywide execs still face a Securities and Exchange Commission fraud suit that centers on familiar allegations, that the company duped shareholders by failing to disclose the growing risk of its subprime lending business.

Still, for one more day at least he and his friends atop the nation’s most notorious subprime lender got off scot-free.

 Article from Fortune’s Wall Street Blog.

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