Short Sales are anything but

Here's how the house buying is going...

The auction has been put off until March 29th.  This should give us/the bank time to get through phase 1.

Phase 1?  Yeah, we had to look it up too.  Bank of America (the lien holder) has 4 phases they go through on a short sale.  Phase 1 consists of getting all the paper work in order.  The seller has to submit a short sale packet which include stuff like tax returns and hardship letters.  Our sales contract is also submitted.  BofA then takes about 15 days to scan all the documents into their computer systems.  Then we have to wait up to 1 and a half months to get a phase 1 negotiator whose job is just to see if all the documents are in order.

Then we get to phase 2.  The phase 2 negotiator reviews the files.  They have 30 days to do so.  Other documents like BPOs and perhaps more documents from the seller and buyer will be requested.  Another 15 days is used to scan the new documents into the system.  From there the phase 2 negotiator reviews the file again.

Now I think phase 3 is when the files get sent to the investors for review.  This is probably where the bosses make some uninformed decision based on completely disconnected information since BofA is so large, their understaffed/overworked employees have no room to use their brains.  This is where they can approve/reject/counter.  They have 45 days to do so.

I'm going to guess phase 4 is when there is an agreement and then everything must close in 30 days.

Going by this, it seems the quickest we would be able to close would be 6 months.  Our realtor has mentioned 4 months.  The information I found was dated February of this year, however, it is a reposting of some other information, so I cannot be sure if it is current.  I did find a lot of BofA short sale message board postings indicating that 6-8 months before closing was common.  I also found a BofA policy document dated late 2009 that they were making efforts to streamline their system and reduce the times.

Given my luck, it will still be 6 months before we get anything.

The seller's realtor has also said there was another offer made on the Tardis house.  It was a little higher than our offer, but we're first in the queue.  Unlike some lenders that handle multiple offers and go with the one they can make the most money off of, BofA handles theirs in the order they got them.  So although the other offer was higher, they'll deal with our offer first.

Of course, banks can change their minds.  Our friends nearly lost their house purchase because the people handling their mortgage insurance changed their policies 1 day before the closing date.