The Equator System

Originally only utilized by Bank of America, the Equator system is now used by the likes of Wells Fargo, GMAC, and others. Equator is an online medium for the negotiation of short sales. Negotiations on Equator normally take roughly 60-90 days for approval. The process is slightly different with each lender, but roughly follows a common timeline:

Initiation, Offer Submission, and Document Collection - 1-2 weeks

The file is first assigned to our profile in the system. The offer is entered into an online form, allowing the bank to see where all the money will go in the transaction. In addition, financial documents (paystubs, bank statements, tax returns) are also submitted so the bank can get an idea of the seller's financial situation.

Valuations - 2-4 weeks

A valuation of the property is ordered through a third party. An agent visits the property and performs a BPO (broker's price opinion,) basically an assessment of what they believe the property to be worth in the current market. This value is not immediately communicated back to the bank, but rather takes time to process. The wait for an available agent before the BPO and the processing after account for the time that this phase takes.

For more on BPOs, please take a look at this post of mine.

Offer Analysis - time variable

This is the lead-up to the actual negotiation of the short sale. During this time the bank reviews the BPO and the financial documents in order to establish if the offer is suitable for a short sale. They conduct an in-depth review and may request additional supporting documents to be uploaded.

Negotiation - time variable

This is most often the longest phase of review. There can be long stretches with little information given. This is the phase during which the bank can either accept the offer as it is or counter it. Offer acceptance does not mean that the file is approved, but rather that the bank is okay with the offer as it is and can move it to the next phase. In the case of a counter, the bank can request changes to a number of things. They can counter the purchase price, but they can also counter on a number of fees or even the proposed settlement date. This can lead to a good deal of back-and-forth, and along with the delays in the bank turning around responses, makes this phase account for most of the time spent on a review.

Investor Submission - time variable, often up to four weeks

Once the bank has accepted the offer, it is forwarded to the investor who actually owns the loan. Time at this point is highly unpredictable given the myriad of contributing factors and how generally inundated investors are with these offers. We cannot directly communicate with the investors, so the turnaround for information becomes even longer as we must request information from the bank and have them request it from the investor. However rare, the investor can request additional counters, though often the bank is good at submitting offers they know will be approved.

Approval and Closing - depends on the buyers, normally 30 days

Once we have approval in hand for the loan (or multiple loans as is sometimes the case) we send them out along with the final short sale addendum.

Epilogue

The preceding describes a typical short sale review in the Equator system. As always, short sales can vary greatly in their duration and nuances. We hope this information aids in the understanding of the process for all parties involved.