by CalculatedRisk on 3/09/2011 11:35:00 PM
After contacting a bank on a daily basis to get a short sale approved and getting no response, I thought I would update our readers on the continued difficulty of getting a short sale approved in a timely fashion. The frustrating thing is in the initial stages the banks are very responsive but once the file is forwarded to a negotiator the process becomes a nightmare since the banks are completely understaffed and short sale negotiators receive over 300-400 e-mails a day from agents like me wondering what is going on with a file.
Unfortunately, many homeowners are unable to successfully negotiate a short sale. According to a recent survey of 2,150 California REALTORS® who have assisted clients with a short sale, only three out of five transactions closed – even with an interested and qualified buyer.
Here are the reasons besides the banks being overwhelmed: For one, no two mortgage agreements are the same, so it can be difficult to standardize short sale processes and procedures. Many homeowners have second mortgages, which further complicate matters. Then there’s the challenge of convincing multiple parties to take a financial loss or, in the case of loan servicers, to forego fees they otherwise might earn during the course of the foreclosure process.
Poor and slow service by many banks and servicers has only exacerbated the problem. Horror stories abound from potential homebuyers and REALTORS® forced to wait 90 or more days for a response to a purchase offer or being required to fax short sale applications or other paperwork as many as 50 times. These delays discourage potential homebuyers and sales agents.