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Bank of America Still Leads Short Sale Efforts

Bank of America continues to lead major lenders in providing foreclosure alternatives to homeowners, as it ended the second quarter with over 25,000 short sales under Home Affordable Foreclosure Alternatives (HAFA), the government's short sale program, and an improved system designed to reach even more borrowers.

The bank also leads the industry in loan modifications under the Home Affordable Modification Program (HAMP). As of July, it has completed over 76,300 modifications under HAMP and another 100,000 under its in-house program. The latter includes many loans that have failed to meet HAMP qualifications.

Short sales are a last recourse against foreclosure for homeowners who do not qualify for loan modification, either because they have negative equity or are too deep in debt for a loan modification to help. Banks participating in HAFA must consider borrowers for a HAMP loan modification before offering a short sale or going into foreclosure.

Bank of America was among the first of major lenders to join HAFA when it was first launched in April. It was also the first to offer loan modifications under 2MP, a loan modification program for homeowners with second liens, with its first 2MP modifications underwritten last July and set to reach homeowners before the end of the month.

Besides their improved short sale program, the bank also has the leading figures in the Home Affordable Refinance Program (HARP). This offers borrowers an alternative to both short sales and loan modifications, targeting those with loan-to-value ratios over 80% who normally would not qualify for a refinance.