I was reading another post on short sales and felt compelled to reply because I found myself getting a little riled up about the topic. The author stated that negative equity in a home is considered a hardship and therefore justifies a short sale. My response in the post was as follows:
"This is news to me. We have several hundred short sales in process with our team of attorneys. Rule number one we abide by when considering a file is whether or not there is a legitimate hardship. If someone can afford to make the mortgage payments, there is no hardship... period! Negative equity is not a hardship and I have yet to see a bank approve a short sale for this reason.
Although I agree that the banking practices and unethical loan officers contributed to the problem, homeowners need to take responsibility as well. They are just as culpable, especially when you factor in the amount of stated income (MIS-stated!) loans. Short of fraud, most homeowners knew what they were getting into and were just banking on rapid appreciation. Yes, they were greedy just like everyone else in the housing supply chain."
My perspective is probably a little different than most because my company Loss Mitigation Network works with thousands of agents nationwide. We train them how to farm for listings (by building a network of strategic partnerships), consult sellers (pre-qualify for commitment, set expectations and disclose potential consequences) list (with a short sale specific listing presentation) and then give the file to our real estate attorneys to negotiate and close (for no fees to the client, agent keeps entire commission).
I share this because we see hundreds of submissions each month and have to turn many away because they don't have a legitimate hardship. Our head trainer is an active broker who has personally closed about 300 short sales, and he hammers this in his class- NO HARDSHIP, NO SHORT SALE.
Unfortunately, that doesn't stop our members and their clients from trying to manufacture bleeding heart hardship stories thinking they might be able to "sneak one through." Unfortunately, upon closer inspection, these are just attempts to walk away from their negative equity and they really can afford their mortgage. What they don't seem to realize is the banks are unemotional and its nothing more than a business decision.
I don't mean to come off as callous to someone who has lost money in their home, but rather, would just appreciate some personal responsibility instead of finger pointing for a change... Brett
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