Bank of America is selling off many of its mortgages. In an effort to streamline the company and become more profitable, Bank of America CEO Bryan Moynihan launched his Project New BAC initiative which includes laying off more than 16,000 jobs by the end of the year, 3,200 of which will be in its mortgage origination unit. With this major cut in its workforce we estimate Bank of America is selling off a tremendous amount of its mortgages to new mortgage servicers.
Bank of America has sent letters out to many of their current mortgage customers informing them of the change, but they haven’t been given a lot of notice of the transfer, in some cases just a couple of weeks.
See an example of this Bank of America mortgage transfer letter here.
Many customers are wondering why their loan is getting transferred, or if the terms of the loans will be different from their original loan terms. According to the letters, the terms and conditions of the loans are not being changed. But customers will no longer have access to their loans through the Bank of America website and won’t be able to make payments at any of the Bank of America banking centers.
This is bound to cause confusion as many customers unaware of the change may still send payments to Bank of America rather than their new named servicer. Keep in mind that according to the Real Estate Settlement Procedures Act outlined in the letter, during the 60 day period following the effective date of the transfer, a loan payment received by Bank of America before its due date may not be treated by the new loan servicer as late.
How Does This Affect Short Sales
For Bank of America customers who are in the process of a short sale, the letter states that any documentation they’ve submitted will be transferred to the new servicer named in the letter. However, this is not happening. We are already realizing that the paperwork is not getting transferred. For those borrowers who were waiting for a decision regarding this process, the decision will now be made by the new servicer, but if they don’t have the documentation, there will be serious delays. So it’s imperative that when you receive this letter you contact the new servicer immediately.Do You Qualify?
If you’re in the process of negotiating the short sale with Bank of America, but it’s not approved yet, you will most likely be forced to redo the whole process with the new servicer. This means you will have to resubmit all the paperwork all over again. We’ve already seen cases where someone was approved for a short sale, and then it got transferred, but it would only be honored for up to two weeks.
Another concern is with Bank of America customers who have optional insurance products such as mortgage insurance, life, or disability insurance through Bank of America. According to the letter, coverage will be canceled so customers will have to contact the new servicer for information about those options.
Be on the Lookout for This Letter
If your mortgage loan is with Bank of America you may receive a letter from them concerning a transfer of your mortgage loan. We’ve heard from some of our clients who’ve received this letter, and know that a couple of the new mortgage servicers named are Seterus and Homeward, who we’ve worked with and are both very responsive and professional. We’ve heard that Select Portfolio Servicing (SPS) is one of the new servicers as well, but they have been very difficult to work with. Regardless of the servicer that now has your mortgage contact them immediately with any questions. They will also reach out to you in a separate letter.
This is all the more reason to hire the right Realtor when doing a short sale since not every Realtor can do a short sale.