A Piece of the Short Sale and Foreclosure Puzzle

January 25, 2011
A headline in this past weekend issue of the Wall Street Journal caught my attention. "BofA Tones Down Mortgage Fight". Since BofA is one of the lenders with whom we deal in our efforts to obtain short sale approval, I thought the headline might refer to their hard line position on approving short sales.
Actually the news piece dealt with the litigation between BofA and the investors that purchased the securitized mortgages. These investors such as Fannie Mae and Freddie Mac and private investors and bond holders are suing BofA to
repurchase these mortgages. Fannie, Freddie, etc. claim that these were inappropriately approved and that BofA should be responsible for the losses they generate.
I am not even close to understanding all this high financial machinations, but one of the issues with short sales and foreclosures has been the inability to completely identify the holder of the note. Wouldn't it be wonderful if BofA repurchased the loans they sold and became the sole owner of the note and trust deed? Perhaps then, a system could be set up for approving bona-fide short sales. Could this, after at least three years of stalling, be a path to getting the underwater borrowers who are no longer making mortgage payments out and new borrowers who will make payments into these revalued homes.
Think about it.