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Bank of America’s New Authorization Form

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Bank of America Short Sales

This is a three part blog detailing:
1.  BOA’s newly required Authorized release form
2.  A short video expaining the changes
3.  Attorney Jeff Watson’s comments more from an investor’s impact.
Bob Hora, SVP Mortgage Servicing Executive at Bank of America Home Loans, affirmed Bank of America’s commitment to streamlining their short sale process.  In keeping with this commitment, Bank of America is simplifying their third-party authorization process for short sales.

On March 20, Bank of America released a standardized Third-Party Authorization form to be used on all Bank of America short sales beginning April 14, 2012.

You can download the form from Bank of America’s Agent Resource Center at http://www.bankofamerica.com/realestateagent.

Bank of America will accept other forms until April 14; however, we recommend implementing the form on your next Bank of America short sale!

You should continue to use your generic Short Sale Authorization to Release Information Form with home owners’ associations, second lien holders, or anyone else you need information from as necessary.

 

 

 

 

A re-blog from attorney Jeff Watson www.topshortsalelawyer.com

Jeff Watson

Dear Friend,

First, allow me to congratulate Bank of America executives on providing a new acronym for themselves: BANA, which fully stands for Bank of America National Association. The remainder of this reading is best done while listening to Madonna sing “Material Girl” (convenient YouTube link is http://www.youtube.com/watch?v=R0FXPqYpt0g).

As Madonna is beginning to go into her pop hit, allow me to express my condolences to the title companies and escrow agents across America that have been completely omitted by BANA from this form. Apparently you are either not allowed to have access to information regarding short sales, you don’t need it, or you are deemed to be completely immaterial to the short-sale process and closings. The complete omission of escrow agents and title companies from this latest BANA Third Party Authorization is most curious.

Page 1 of this two-page authorization is benign. It is, however, worthy of noting that now the homeowner is deemed to be the one responsible for selecting the authorized representative.

When we move to page 2, however, it gets interesting. I will do my best not to comment upon the poor grammar used in the very long run-on sentence. Instead, I want to focus on the one key word that was undefined but means everything. By now, Madonna will have said it multiple times if you are listening to the song: “MATERIAL”.

Unfortunately, we are now beginning to go down a rabbit hole with BANA as to what do they mean by “material”? Material in the present sense, or material six months after the deal closes when someone says, “Well, if I would have known then what I have learned now, I would have done something differently!”

When you read that language, you will see that BANA wants to create and impose a duty not to omit or conceal, or to fail to disclose, on the authorized representative. Did you notice that the duty runs unilaterally rather than reciprocally? Yes, BANA still has the right to lie to you about whether they have really received the documents. BANA still has the right to lie to you about the results of the BPO. Now you see why I wanted you to listen to Madonna’s “Material Girl” to distract you from the enraging bias, attitude and arrogance displayed by BANA.

We then turn to the very difficult matter of what a reasonable person believes is a material fact regarding one of these complicated transactions known as a short sale. In case you are wondering, reasonable people can disagree over what is reasonable. Therefore, reasonable people could disagree over what is a material fact. Given the unilateral nature and poor quality of thought put into this Third Party Authorization, I would be hesitant to execute this Third Party Authorization and return it to BANA without including in it your definition of what you believe to be a material fact. The absence of a definition of “material” opens a relativistic “rabbit hole”.

Allow me to suggest to you what a material fact is. A material fact is one that would cause a reasonable person to reconsider their willingness to participate in the transaction or to go forward and consummate the transaction. Allow me to give you an example of an obvious material fact that an authorized representative would be under a duty to disclose. If the authorized representative is aware of the fact that the property could or will be resold to a different buyer who has already indicated an interest in paying $40,000 more than what is being offered in the short sale, that is a material fact of which BANA would want to be told. An example of an immaterial fact would be when someone doing their home inspection realizes that the trim is painted in antique white rather than in white semi-gloss.

Bottom line summary: If a beginning real estate investor plans to buy a short-sale property and signs the Third Party Authorization as the authorized representative so that they can negotiate their own short sale, they now are at a competitive disadvantage, because everything that they know that makes this an attractive deal to them, they must now disclose to BANA.

Oh, be careful authorized representative what you know,

Oh, be careful authorized representative what you see,

Oh, be careful authorized representative what you hear,

For what you know, see and hear must be disclosed to big, bad BANA!

 

Best regards,
Jeffery S. Watson

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