Have You Received a Bank of America Home Transition Guide?

Bank of America began sending out Home Transition Guides to those who have been denied a loan modification.  Bank of America services about 40% of the loans in Massachusetts so they are by far the largest servicer and the one we deal with most often.

What To Do When You Receive The Home Transition Guide:

Don’t Panic!

This guide is meant to help you find alternatives to foreclosure, one of which is doing a Short Sale. If you are unable to bring your loan current, you must leave your home. Distressed homeowners should be proactive about using this guide to get themselves into a more affordable living situation.

This easy to follow guide breaks down all the options for someone who has to give up their home. We applaud Bank of America for finally beginning to get their act together on real foreclosure alternatives. They know that loan modifications are for the most part unsuccessful.  This is clearly why they have created this Home Transition Guide.  Other major banks should have a similar guide.

Summary of the Home Transition Guide and Ways to Avoid Foreclosure:

How To Avoid Foreclosure – Section 1:

Provides information on how to avoid foreclosure through either a Short Sale or Deed in Lieu of Foreclosure. One of the key points in their “Alternatives to Foreclosure Chart” is that with either a Deed in Lieu or Short Sale you will have more control over how you leave your house.  It also explains the difference between a Short Sale and A Deed in Lieu of Foreclosure: with a Short Sale you are selling your house to someone else and with a Deed in Lieu of Foreclosure the bank is taking back possession of the property.

One of the most important points they make is that when you decide to do a Short Sale be sure to “reach out to a licensed real estate agent who has experience with short sales.” We couldn’t agree more.  For more information on this please watch our video on “The importance of Bank Relationships to Conduct a Short Sale.” (See also: What Is A Short Sale? )

Helpful Resources on Relocation, Rebuilding Credit, and Avoiding Scams -Section 2:

In this section Bank of America partnered with the United Way to offer resources you can turn to for help transitioning out of your house. This section shows you what to look out for and introduces other organizations that may be able to help. Unfortunately, there are many scams out there so it’s important to be careful during this frustrating and vulnerable time. It’s amazing that there still are companies out there who charge upfront fees and tell borrowers to stop paying their mortgage and pay them instead. One of the websites they point out is www.loanscamalert.org, which offers guidance on how to spot scams and which organizations to trust.

This guide also does a tremendous job of describing how best to rebuild your finances, beginning with an outline of what part of your net income should go towards which cost of living expenses. They provide a chart showing which percentage of your income should go towards such expenses as food and transportation. They suggest you spend no more than 35% of your total income on housing.

Prepare to Relocate – Section 3:

A checklist of actions you will need to take to do a Short Sale or a Deed in Lieu of Foreclosure.  Reminder- if you are going for a Short Sale you MUST be sure you hire an agent with experience in short sales.  These sections also have great reminders about the things you need to do when moving such as: calling the utility company, completely cleaning out your property, and leaving on the date you agreed to.

Home Budget Worksheet and Additional Resources – Section 4:

One of the best ways to take control of your financial situation is to know exactly what your total income is and what your monthly expenses are. Be sure to count incidentals such as going to the movies dining out, or gym memberships to get a handle on how to accurately budget for your transition. This guide provides a budget worksheet to calculate these costs. It’s a good way to decide how to reduce your bills and cutting back on expenses.

What Can You Do?

Remember, if you need to sell your home and it’s worth less than what you owe, contact us so you can sell your home and get on with your life. Don’t walk away and let the home go into foreclosure. With a short sale, in most cases you won’t have to pay out of pocket costs and the bank will waive the deficiency balance.

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