It has certainly been our experience that trying to process a short sale through the Loss Mitigation Department at Bank of America Home Loans, LLC, (the former Countrywide Home Loans) is one of the most trying experiences one can have. A week to get permission to speak with them, a week to upload the purchase and sale agreement, months to get a negotiator assigned, and then never to receive any communication from them except in the most cryptic form. Doesn't sound like a company with any worry about staying in business.

Today's Housing Wire has this article noting that to date, Bank of America is leading the pack among major banks in fewest number of permanent loan modifications processed to date. 98 permenant mods for what Treasury reports as over 1 million HAMP eligible loans (B of A disputes this number).

Residents of Kitsap County, Poulsbo, Bremerton, Bainbridge Island, and Silverdale who are in default on their mortgage or think they might miss a payment in the near future, or want to see if you might qualify for a loan modification that could reduce your current mortgage payment to an affordable level should be checking out the Home Affordable Modification Program (HAMP). A Treasury Department announcement on November 30th just widened the possibilities, even for those who don't qualify for a loan modification.

The new program, called Home Affordable Foreclosure Alternatives Program (HAFA), allows HAMP applicants who are turned down or fail to obtain a permanent loan modification to request consideration for a short sale or deed-in-lieu of foreclosure as an alternative to foreclosure. A recent article from Housing Wire states that the program will be implemented in April 2010 and lays out some of the incentives that Treasury is offering qualified servicers to complete these alternatives to foreclosure. See the Treasury announcement here.

The goverment's efforts probably won't alleviate all of the current problems with short sales, but they represent a growing acknowledgment that short sales provide a much more desirable outcome for many distressed homesellers than letting their homes go into foreclosure. Since a high percentage of trial loan modifications are not expected to convert to permanent modifications, the HAFA program will provide a logical next step to help homeowners avoid foreclosure.