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How Servicers Defraud Their Investors second example

By
Real Estate Agent

I'm making my second example of how servicers defraud loan owners. The example is how most servicers handle short sales. Short sales sell for less money than normal listings. The reasons are many. The biggest reason is because buyer's hate them. Buying a short sale is crazy.

The short sale process is broken. An agent lists a house and picks a price out of a hat. Why is that? Because no one really knows what will happen with the BPO and the bank.

Buyers are almost guaranteed a 60-90 day wait. It takes 30-45 days for the servicers to assign a negotiator. Then it takes 15-45 days to get a BPO back in the hands of the negotiator. Then, it takes 7-10 days to get an answer from the negotiator based on the BPO.

In addition, the bank can reject the short sale at the end of the 90 days. Or, the seller can sell the house to another buyer who is willing to pay more. Because of these hassles, buyers are reluctant to make offers on houses.

Let's contrast this with a wealthy person who owns a mortgage on a house. We'll call this wealthy person Richard the Lawyer. I actually met a lawyer who gave loans on foreclosures. The house is being sold as a short sale and Richard the Lawyer stands to take the loss personally.

The house is listed for sale. The agent informs Richard of the listing price. Richard asks an agent friend if the list price sounds good. The agent friend says the house should be price $20,000 higher. The listing agent changes the asking price. The first offer comes in a few weeks later. The buyer gets an answer in 3 days.

Would this house sells for more money than a traditional short sale where the buyer can't get an answer for 90 days? Of course it would. That's why, in my opinion, any bank that doesn't handle their short sales this way is defrauding their investors.

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Ben & Chris Curry - The Short Sale Agent's Advocate

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