Bank of America’s Equator System

If you have been negotiating short sale, you have been exposed to Bank of America’s new system for short sales called Equator.  The new system was put in place to “speed up the process”.  We have obtained several approvals now through the system and have gotten familiar with the process for using the Equator system.  We will walk you through a typical short sale.  All time limits are set by Bank of America. 

  1. File initiated in the Equator system and third party authorization uploaded
  2. Listing information and buyer information uploaded into Equator
  3. Purchase contract uploaded
  4. MLS, pre-approval, HUD-1 and MLS photo uploaded
  5. Seller calls in and sets up their side of account
  6. Seller receives email with temporary password into Equator account
  7. Seller sends temporary password information to Berlin Patten.
  8. Berlin Patten logs in, completes  financial information and uploads paystubs, bank statements and tax returns
  9. BOA checks “vendor” status (verify we are all who we say we are)
  10. BPO is ordered
  11. BPO is received back
  12. File is assigned to a negotiator
  13. BPO value is input into the Equator system                                                                         
  14. LRV (Loan Value Ratio) input into system
  15. HOI (homeowners insurance review) is done                                                                    
  16. Payoff quote is ordered                                                                                                                               
  17. Payoff figures are input into the Equator system                                                                              
  18. Soft credit pull is done to check Seller Beacon score
  19. Foreclosure Value bid is obtained
  20. Negotiator must input NPV (net present value)
  21. Negotiator must now analyze the offer
  22. Negotiator must now negotiate the offer
  23. Tentative yes, or a counter offer, or a decline is received.
  24. Yes or counter offer must be replied to.
  25. Negotiator must now analyze the offer
  26. Negotiator decides whether to accept or reject or counter the counter-offer as presented.
  27. If negotiator counters we return to Step 20, If negotiator accepts we move to Step 28
  28. Negotiator must input NPV (net present value)
  29. Negotiator must now review and prepare file for final Investor approval
  30. If loss ratio is high file sent to Executive Review Committee for clearance
  31. If loss ratio is very high file then sent  to Senior Vice President for clearance
  32. File sent for outside (Investor) approval or counter-offer.
  33. If counter-offer go back to Step 20, if approval to Step 34
  34. Investor approval received
  35. Approval letter prepared and sent thru Equator

Although complicated, this process has resulted in some improvement to Bank of America’s short sale approval timeframe. However, it remains a lengthy one, as you can see, and the parties should continue to be apprised of this fact whenever possible so that expectations remain reasonable.

Written and posted by Karen Gagliardi, Business Development Coordinator with Berlin Patten, PLLC.

Did you find this real estate law content useful, but need actual legal counsel?

Speak to a real estate attorney!

, , , , , , , ,

Prepare Your Buyer/Borrower for the Closing

  With the volume of closings that we have, we handle a lot of different personalities, situations, and behaviors when we go through our closing process. Being aware of these in advance, and perhaps trying to get ahead of the issues, can sometimes make the difference between a happy closing and a dramatic one. 1.…

Am I Bound or Can I Entertain Other Offers?

“Do I have a valid agreement or can I entertain other offers?” In this day and age, this a question that is becoming increasingly prevalent.  For example, you receive a call from a buyer’s agent and the agent indicates that their client has agreed to buy your listing at full price, with no contingencies, closing…

Tips on Inspection Periods for Short Sale Transactions

As most of you have likely seen, the demand in today’s market for short sale properties is very high, with decreasing inventory and a large pool of buyers.  In fact, property prices are increasing in many areas because of this high demand, and short sale sellers are often receiving many offers – some possibly even…

Addressing Financing Contingencies

Under the Financing Contingency paragraph of the FloridaRealtors/FloridaBar-1 Contract and As-Is Contract (hereinafter collectively referred to as “Contract”), when can the Buyer or Seller terminate the Contract and is the deposit returned to Buyer? Prior to Loan Commitment Date, Buyer notifies Seller in writing that Buyer can’t obtain financing after using diligence and good faith,…

Deficiency – What is it and How Much Time Does My Bank Have to Sue?

Originally Published: 3/27/2012 When an underwater home is sold in a short sale or a foreclosure, the greatest concern is almost always over the remaining mortgage balance owed by the homeowner (known as a “deficiency balance”) and how long the lender has to try to collect it.  When a property is sold in short sale,…

Bank of America Short Sale Seminar Summary

The Berlin Patten short sale negotiating team recently attended a Bank of America Short Sale Seminar.  The following is a brief summary of what Bank of America advised its seminar’s attendees:  Short sales are about two primary things to Bank of America:  Hardship and net proceeds Investors are reluctant to postpone foreclosures as the buyer…

Response to Anonymous Blog Entry: Title Agents should still not be conducting short sale negotiations

On or about September 30, 2011, an anonymous reader provided a response to a blog Berlin Patten had sent to its readers regarding who can or should be engaged in the negotiation of short sales. While we debated whether or not to further comment on the subject (as the blog response did not really specifically…

Short Sale “Pre-Approvals”

We are frequently asked about listings being marketed as “pre-approved” in the MLS. We suspect this designation is intended to imply or suggest that there can be a quick closing.  We feel that the use of the term “pre-approved” can be misleading and lead to unrealistic or false expectations. Other than a pre-approval under HAFA,…

Short Sale Negotiations

We have been asked by several real estate agents to investigate whether or not a title company or title agent can conduct short sale negotiations. One of Berlin Patten’s contacts at the Florida Department of Financial Services, Bureau of Investigation, Title Services, responded to our inquiry as follows: “The license for a title insurance agent does not…

Fraud Investigation – A Top Priority for Freddie Mac

In previous blogs, we have discussed our concerns about short sale fraud and the warning signals to watch for.  According to Freddie Mac’s Mortgage Fraud Officer, Short sale fraud has also become the top priority for Freddie Mac’s fraud investigation unit as well. Per the attached article, recent trends that Freddie has been alerting Real…

Assignable Contracts & Specific Buyers

Please be advised that short sale lenders are getting very strict about approving the specific buyer identified on the contract. As such, lenders are carefully scrutinizing assignment provisions in contracts. Short sale lenders who are reviewing contracts (that permit the contract to be assigned) are kicking back the contracts more and more frequently.) Lenders are…

Berlin Patten’s Short Sale and Bankruptcy Services

Real Estate professionals are frequently confronted with listing a short sale property encumbered by two or more mortgages and a seller who is strongly considering bankruptcy as its “exit strategy.” We have struggled with that same scenario… working on a short sale for months, and then the seller decides to file for bankruptcy. At that…

HAFA Policy Changes for Servicers

Lenders’ inconsistent eligibility requirements seem to be the most consistent thing we have seen with respect to the Federal Government’s HAFA (Home Affordable Foreclosure Alternatives) Program.  The Federal Government seems to have taken notice. On August 9, 2011, the Home Affordable Foreclosure Alternatives Program adopted certain policy guideline changes.  The changes, we presume, are in…

The Importance of a Municipal Lien Search

Performing a municipal lien search is crucial when purchasing property in this day and age. In many cases there are unknown or undisclosed fees, costs or other issues that will impact a buyer post-closing. In addition a municipal lien search generally will assist a seller in complying with contractual terms to avoid a default. Examples…

Short Sales – Working with Second Lenders

Anyone who works with short sales knows that it can be very difficult to get short sales approved when there is a second (or even third lender). To successfully complete a short sale, ALL lenders (among others) must agree. The problem is that in many instances, they do not. In fact, we have seen situations…

A New Buyer Can Be Substituted for One Who Walked

We have learned of a very interesting development with respect to Bank of America. Bank of America has advised that it will permit a new buyer to step into the shoes of a buyer who has walked away from a transaction.  Furthermore, Bank of America has advised that the process will not have to begin…

Deficiencies and Deficiency Judgements

We spend a great deal of time counseling prospective short sale sellers regarding the advantages of attempting to pursue a short sale rather than allowing their property to go through the foreclosure process. Many people do not realize that the foreclosure process is a two step process. The first step is the sale of the…

Bank of America Realtor/Broker Listing Agent Certification – Questions and Answers

The new Bank of America Realtor/Broker Listing Agent Certification (the “Certification”) has fostered some significant concern among real estate agents. The most common questions and our comments/responses are as follows: 1. Question: Does paragraph 1 of the Certification mean that Bank of America will not pay a commission. Answer: No! Bank of America never paid…

Wells Fargo Short Sale Addendum

As expected, Wells Fargo has followed suit with Bank of America and has put out a new Short Sale Affidavit (attached hereto). Similar to the agreements recently published by Bank of America, Wells Fargo appears to be getting more aggressive in trying to curb flips and low offers and is now requiring realtors and closing…

Bank of America Document Warning

Please be advised that Bank of America is now requiring the parties to a short sale transaction to execute certain form documents before they will consider your short sale for approval. The buyer and seller will be required to execute a new addendum, and somewhat interestingly, the agents involved in the transaction will also need…

Nonlawyer Assisting the Short Sale Seller: Ministerial Acts or UPL?

As you know, short sale negotiations (and negotiators) are coming under great scrutiny by local and federal authorities. There are significant new disclosures for non-attorneys, and now the Florida Bar is weighing in on the subject. In essence, various proposals under consideration by the Florida Bar suggest that a great deal of the short sale…

“No Cost” Short Sales

You may have seen solicitations from companies announcing “NO COST” Short Sales that can be closed quickly, sometimes as quickly as 45 days. We suggest that you use great caution when engaging these companies or recommending these companies to short sale sellers. First, there is no such thing as a free ride. In most cases,…

Freddie Mac Does Not Allow HAFA Post Contract

Freddie Mac and Fannie Mae recently announced a program similar to the government supported “Home Affordable Foreclosure Alternative” program. Although the programs are similar, you should be aware of some of the differences between each program. Most importantly, a Seller may not be eligible for HAFA if they have a Freddie Mac backed loan and…

Bank of America is on Board

Bank of America will be participating in Obama’s Home Affordable Foreclosure Alternative program starting April 5th. The HAFA program is designed to qualify a home owner and a price for the home in advance of the contract.  The Bank of America representatives will be going through an extensive training this weekend before the launch on…

Are Proposed New HAFA Rules in Violation of Fair Housing Act?

There have been discussions regarding the government’s new HAFA program and HUD’s Fair Housing Act.  One view is that the HAFA program breaches the Fair Housing Act because it is discriminatory against people who would like to sell their home as a short sale, but cannot demonstrate a hardship. The most recent article I’ve read…

Short Sale Scheme

You may have noticed a proliferation of “strategies” initiated by buyers/investors to try to capitalize on short sale opportunities. They are obvious to spot, as they each use some type of unique vehicle, such as the use/creation of a trust, land trust, limited liability company, or option arrangement, and essentially  involve two (2) transactions (referred…

Foreclosure Sales Moves to the Web

Starting July 14, 2009 Karen E. Rushing, Clerk of Court and County Comptroller, will offer a web-based service that sells Sarasota County foreclosed property on the internet. If you wish to participate in the Realforeclosure online service, proof of publication and sale fee must be received in the Clerk’s Office no later than 5:00 p.m.…

18 Month Moretorium on Home Valuation Code of Conduct

Fannie Mae and Freddie Mac implemented a new appraisal rule starting May first, written by the office of New York Attorney General Andrew Cuomo last year; however, critics of the new rule applied pressure before the July 4 congressional recess with the introduction of bipartisan legislation that would mandate an 18-month moratorium on the “Home…

Fighting Foreclosure

There are differing opinions concerning homeowners who contest foreclosure proceedings in an effort to continue to stay in their homes without making mortgage payments. A recent article in the Sarasota Herald Tribune offers one perspective. The article titled “Fighting a foreclosure may beat the alternative” written by Tom Lyons reads “Staying, it appears, can be…

FHA Changes Condo Rules

There have been many changes recently regarding the financing of condominiums.  FHA recently announced its newest guidelines for financing condominiums. Realty Times provided the following summary of these rules. Kenneth R Harney wrote, “On one hand, the rules allow lenders a lot more flexibility in reviewing condo project eligibility and documentation.” He goes on to…

New Appraisal Guidelines

On May 1st, Fannie Mae and Freddie Mac imposed a new appraisal rule, referred to as the Home Valuation Code of Conduct. It is now coming under attack from the National Association of Realtors. The article read: “The intent of the rule is to improve the accuracy of appraisals by eliminating pressure on appraisers from…

New Financial Regulatory Reform Proposal

The Obama Administration issued a Financial Regulatory Reform Proposal as of June 17, 2009. The Mortgage Bankers Association writes:  “This proposal’s objectives are (1) promoting robust supervision and regulation of financial firms; (2) establishing comprehensive supervision of financial markets; (3) protecting consumers and investors from financial abuse; (4) providing the government with the tools it…