Why Do Central Connecticut Short Sales Take So Long? Part 4
The first 3 parts of this series described how the process of a short sale works when all the steps are followed logically and there is a continuity of flow. This, however, is not always the case and there are many times when there are lapses and interruptions and the process just drags on and frustrations are numerous.
While we enter the short sale process looking to get relief for the seller, it should be understood that at all times the seller is always in a state of pre-foreclosure. The bank may be addressing a request for relief in one department while another department is processing the debt through foreclosure. The foreclosure can be issued even at the 11th hour of the short sale process. For this reason alone, an experienced lawyer, familiar with short sales and foreclosures should be consulted and retained by the seller to assist with the process and also to make the court appearances that will inevitably occur when a home is in foreclosure. It should be noted as well, that once the bank has issued their approval letter, they will stall the foreclosure allowing for the closing, but not with much time allotted past the date placed on the letter. The buyers that have done little must now charge to get their mortgage issued.
Not all mortgages are held by banks. Many mortgages are held by syndicates of investors that use servicing agencies to manage the loans and collect the monthly payments. Unlike banks, investors of this type work to different standards and often will elect to allow the home to go into foreclosure in order to collect on the mortgage insurance policies. The home can then be put back into the system foreclosed and the recovery value adds to the bottom line, with more allowable tax deductions.
There are too many files that are sent through a loop of incompetence and linger in a state of limbo. Regretfully, no one knows when this can happen, or if it’s a matter of policy. The writer cannot speak to any bank in particular that has more instances of stall than others, although banks with a larger portfolio of loans acquired through acquisitions have a higher probability of this happening. An insufficient volume of work with too few qualified file managers can always lead to a lost file.
A Central Connecticut home owner does not have to be immediately behind on their mortgage in order to initiate a short sale. A divorce, job loss, or relocation can afford a home owner that has no equity in their home and doesn’t have adequate resources to pay down the loan an opportunity to file for a short sale. At some point, once a contract is close, the seller will need to stop makin their payments. The affect will still be noted on their credit reports, and there will be a waiting period before they will be allowed to purchase again. In these instances, a well documented hardship is critical as well as a real estate agent that completely understands the process.
Working with an experienced and qualified short sales professional affords a Connecticut home owner a greater chance of getting the file through the process. There is a procedure that keeps a file in order and ensures that all the information that a lender may need to review and process a file to culmination is followed. There are many agents and short sale negotiators that understand the process and even for the most experienced, a satisfactory conclusion to the seller is not guaranteed. There is little chance of avoiding foreclosure by doing nothing.
If you or someone you know is having problems meeting their mortgage payments, I may be able to assist them with a short sale.
Previous posts in this series:
Why Do Central Connecticut Short Sales Take so Long? Part 1
Why Do Central Connecticut Short Sales Take so Long? Part 2
Why do Central Connecticut Short Sales Take so Long? Part 3
Why Do Central Connecticut Short Sales Take So Long? Part 4
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