Bank of the West Gets Tough on Short Sales

In the Quincy Cove’s ongoing news coverage of real estate short sales and their affect on the local Quincy real estate market and nationwide market we are now going to examine Bank of the West’s (NYSE:BNP) short sale process. Last week we analyzed Bank of America, Chase, and the now acquired Washington Mutual. Bank of the West handles real estate short sale requests radically different than some of the larger bank players. With BOW in certain departments there is no separation between real estate short sales and other types of loan defaults (i.e. credit card, mortgage, etc…).

If these similar industry products are in high default the real estate short sale approval decision process will take even longer. The bank’s ‘bear branded logo’ is quite appropriate for their stance regarding short lien payoffs. If Bank of the West’s short sale process could be summed up in one word, that word would be ‘aggressive’. After interviewing several different Quincy real estate agents, there seems to be a consensus that some departments in Bank of the West are trying to cut Realtor’s commissions down to 4-4 ½ combined percentage points.

In many cases, Bank of the West processors will initially only allow a small portion of the short sale profits to be paid towards any junior liens. The amount varies, but generally they have been allowing between $1,000 to $5,000 on purchases under $300,000. According to Bank of the West’s short sale management these types of negotiations are pretty typical for their departments.

If you have a junior lien with Bank of the West be prepared for them request a new mortgage note be signed for some of the remaining unpaid balance. If they will actually accept a short pay off without a new note depends on how well negotiations go. Generally, if your first lien is with BOW you can expect fairly quick approval. If you have a second lien with BOW be prepared for delays. The 2nd lien short sale department is different than the first short sale lien decision makers. In fact, the departments are in separate States. Second lien approval with BOW is still ranging from 2 month – 4 months+ for approval.

Bank of the West short sales are not terribly hard to accomplish, but negotiating between first and second lien placement will take an iron will and no hesitancy to escalate the file to department supervisors.

 Print This Post