Dignified Transition Solutions Short Sale Process

Dignified Transition Solutions Short Sale Process is a new one relative to others.  In our experience they are a third party that Bank of America has outsourced some of their short sale and other loss mitigation services to.   For the most part, the staff at DTS is generally more amiable and ready to attempt to help.  However, a round of phone calls in a day will reveal that their staff lacks the experience and often will add days if not weeks to the short sale process.   Keep in mind though, that these delays won’t be due to negotiations, but just inexperience which makes it somewhat frustrating.

In our experience Dignified Transition Solutions works with a majority of FHA Short Sales.  This process should be easier, but unfortunately, as mentioned above, their inexperience and overall lack of urgency can really wear out a client.  They sure are friendly though.

Expect at least 4 months from start to approval letter if you have a DTS short sale.

Bank Of America Short Sale Process Update

We’ve talked a lot about the Bank of America Short Sale process over the years, but they continue to be slowing improving their processes, almost to the point of being the preferred lender to do a short sale with.  Unfortunately, that distinction won’t help them a ton but will help home owners get over their fear of the short sale process.  They recently made a few changes to their process.

One of the biggest problems with short sales is that the home buyer tends to get antsy and decides to buy something different.  This usually causes the short sale “processor” to have to start over.

What To Do If Your Bank Of America Short Sale Buyer Walked?

What Do You Do If Your Bank Of America Short Sale Buyer Walked? You can do a buyer swap. That’s right you can now swap buyers out without having to start over at Bank of America. This has been requested for, for some time now, but it’s finally a reality. The reason they didn’t do it before was to prevent “investors” from abusing the system. At least that’s the story we were told!

In any case, this is great news if you are a short sale agent, short sale seller or even short sale buyer!

The video below goes into more detail about this news.

Do you take multiple offers when handling short sales?

No.  That’s the short answer.

The long answer is more about how the banks deal with offers and how they handle them.  In some instances, one bank may be more equipped to deal with multiple offers.  Certainly, Bank of America and GMAC who now use the Equator System have more resources now to look at more than one offer.  Even in these cases we don’t do multiple offers and here’s a few reasons why:

• The negotiators have a huge case load, multiple offers confuse them.
• Multiple offers, means multiple packages of paperwork.
• Multiple offers may influence the bank to wait out for a higher offer.

Doesn’t Multiple Offers on a Short Sale Increase (because the competition makes for higher offers) the Bank’s Net, reducing the payoff and helping the seller?

It’s intuitive to think this way.  After all, multiple offers can drive the price up.  In a short sale having multiple offers can be detrimental to the deal and here’s a few reasons why:

• Often the best offer is not the most patient buyer
• Often multiple offer scenarios can scare buyers into thinking hard about their backup plan
• Multiple offers can drive the price right out of qualifying for short sale but still fall short of helping the seller sell the home.

If a seller is going to take multiple offers, there needs to be a clear winner and only one winner with backup offers taken from the other bidders.

Here’s your scenario:

PMI (Private Mortgage Insurance, also known as Mortgage Insurance) company has a policy on the shorted loan that says they will pay the investor 20% of the loan amount.  So if you have a 400K loan, that’s $80K total payout.  In order to pay this, the insurance policy has certain things in place to make sure, just like any insurance policy, it’s designed NOT to be paid out.  Some of those actually related to short sales.

In a short sale, the investor would like to get the insurance to cover their loss on this. In most cases,  20% of the total loan PLUS whatever the investor gets through REO Sale = MORE THAN YOUR SHORT SALE.

That’s a big fail.

This is why you see Bank of America short sales getting so many complaints.  The investor is saying, “I want to help you, but based on my due diligence and my insurance policy, you need to bring another 20K to the table.” Dead deal.