Q&A: Does listing your house for a short sale stop the loan modification process? With Bank of America?

Question by lia: Does listing your house for a short sale stop the loan modification process? With Bank of America?
We have been attempting a loan modification with Bank of America for 6 months. We are no closer to getting any answers from them then we were 6 months ago. We have sent our papers in at least 7-10 times, as requested. They continually tell us they are making progress, then request all the paper work over again. We have been denied once already because they had down we made $ 20,000 more a year then we really do. We are not sure where they got their numbers from, so we started over. We have gotten several letters in the mail saying our house is going to auction on December 1st. Our B of A contact says to ignore the letters and the latest news was we are approved for trial payments and then the next day we got a letter on our door saying our house was going for Auction, then a few days later another letter in the mail saying they needed all the paper work over again. They feed us a bunch of BS and we have read the horror stories of other people having their homes foreclosed on, without notice. B of A tell us not to worry they are making progress on our loan modification and we will know any day and then weeks go by and guess what they need new paper work. We have consulted with a short sale agent and are setting up a meeting to list out property because we didn’t not want to foreclose on our home, we would much rather short sale. He told us in his experience listing the home for Short Sale does not stop the loan modification process, that we may still get approved for a loan modification before the sale, then we can still stay in our home. B of A continually tell us not to list out house, that it will stop the loan modification process. Our feeling is we really have no choice, we are no closer to a loan modification now then we were 6 months ago. They will most likely continue to delay this process and we will get a notice one day that our house was sold. We have gotten nothing but bad news in the mail from them and nothing but BS over the phone, nothing ever good in writing. We feel they are probably lying because that is all they seem to do. Does anyone know the answer? Will listing our home for a short sale stop the loan modification process with B of A? Especially interested in anyone who works for them in that department or have listed a B of A home that has then still been offered/received a loan modification. We are in California. Thanks.

Best answer:

Answer by linkus86
Tough situation. The short sale agent is right. You can sign on with her to list your house as a short sale, but can’t sell it as a short sale until you get approval from your lender. It is in the lenders best interest to do both, especially in California where lenders have no recourse to collect anything more from a borrower after foreclosure and liquidation. Be tenacious with BOA and continue to call everyday.

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