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Mr. Bank/Lenders that are rejecting Short Sales ~ Where is the logic?

Do you get the feeling the lenders are rejecting short sale requests without really thinking about it? And do you wonder why? I do. I am finding that the lenders are taking more time to say NO to short sale requests.

It is puzzling to me because once that home is foreclosed on, it then becomes a REO property which means that it will more than likely sell for less than what the short sale offers were for.

Below are two lists that will help convince a lender to agree to a Short Sale instead of forcing a foreclosure:

SHORT SALE

Fewer legal costs
Greater recovery ratio
Fewer non-performing loans
Lower reserves
Existing loans more marketable to secondary market
Fewer R.E.O. marketing costs
Fewer repairs likely
Greater marketability of property
Likely greater value from broker price opinion
Less negative impact on neighborhood

FORECLOSURE

More legal costs
Recovery of lesser amount
More non-performing loans
Higher reserve requirements
Possible negative impact on salability of existing loans to secondary market
More R.E.O. marketing costs
Negative perception by public
Possible extensive property repairs
Marketing challenge of extensive inventory
Likely lower appraisal value can have negative impact on neighborhood & community

As a real estate agent, I will list and sell them both or either, but as a realist -- I am looking for some logic to this madness: I am not understanding why the lenders are being so hard nose with short sales when they are a better options not only for the homeowner but for the lender in the long run. ~~~ I would appreciate anyone shedding some light on this question. I just want to understand this...

Need a Short Sale Specialist?

Want to purchase a REO property?

Need information on the foreclosure process?

Give us a call today! 866-750-8282

For a FREE MARKET EVALUATION of your home Call us or visit http://www.motheranddaughterrealty.com/

Check out: Real Estate Terms/Definitions. And take a look at Mother and Daughter Blog and D'Adrea's Mother and Daughter Blog - for other tips for Sellers and Buyers. I work with my daughter as the Mother and Daughter Real Estate Team at Family Realty Group and we also focus in Short Sales and the Pre-Foreclosure process. Our consultations are free. Our aggressive marketing plan includes on-line listing advertising. If you are thinking of selling or buying a home in Northern California's Central Valley (San Joaquin County CA - includes Stockton, Manteca, Tracy, Lathrop) plus Stanislaus County CA - includes Modesto, Salida, Riverbank) & the East Bay (Alameda County CA - includes Hayward, Fremont, Newark, Union City & Oakland) and surrounding areas give us a call. If you would like a FREE Home Seller or Home Buyer Handbook, please call us at 866-750-8282 or email at US.

Check us out on website: http://www.motheranddaughterrealty.com

Posted by Rosemary Brooks -Mother & Daughter (866)-750-8282 on 04/12/2008 04:08 AM

Comments (20)

short sale, reo, foreclosure, family realty group, stockton, rosemary brooks

Originally posted at: Mother & Daughter Blog: Mr. Bank/Lenders that are rejecting Short Sales ~ Where is the logic?

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20 Comments on Mr. Bank/Lenders that are rejecting Short Sales ~ Where is the logic?

APR

2008

Too bad they don't think of it that way they are very unresponsive during the short sale period and with out exception they lose if they take the house back. I wonder what they would do if it were actually their money and not the investors.

Their behavior really perplexes me too! I'd like to say they are trying to cover their tracks but rejecting short sales doesn't prove that point. I've had 2 short sales so far, 1 is now being foreclosed on and the other is about to be. The bank told the 2nd one they could lower their price to $159,900 where we got a lot of showings and offers so the bank said they wouldn't accept any less than $175,000 Go Figure!?!

I think overall the banks are considering a lot more short sale offers than they ever did before, and that may be one of th biggest reasons for delays in replys to offers?

Interesting. I really have not come across that. I have come across poor systems in place to handle short sales and get them done in the most effective time frame.

Great information Rosemary. We haven't seen too many short sales in our area but we're preparing for them. This info will help!

Banks are seldom logical

Hi Rosemary

Where is the logic with the banks?

Sincerely

Tom Braatz

Rosemary ~~ Most banks have too much "red tape, layers of management and not enough man power to process and make decisions.

I just finished negotiating a short sale from hell with Saxon

They insisted on getting 100% of the BPO. INSANE!

Luckily for the sellers I had a resident buyer who could pay that high so I just collected a loss mit fee for my work.

I had a good talk with the loss mitigator and she said that the bank has been taking a beating so badly the last few months that there was basically a moratorium on short sales.

Yeah, that's the way to react to a loss - set yourself up for more losses by not cutting them now... LOL

Perhaps they were too loose with giving away too big discounts earlier but now its the other extreme. How about a little common sense and moderation fellas?!

www.nquicksell.com

APR

2008

Thank you all for the input, I can tell this is going to be one of the Groups I keep involved with..

Terry ~ Good point. Maybe we should be able to deal direct with the investors. Cut out the illogical.

Sara - yeah I never trust when the bank gives out the figures.

Kevin ~ I hear you but they end up denying the request - where is the logic?

Heather ~ You and your homeowner are relatively blessed!

Laura ~ true statement but it affects so many with these unexplainable moves from the bank.

Tom - I'm looking!

Marzena ~ Maybe we should be able to negotiate with the investors and cut out the middle man.

www.quicksell - Loss mitigation: not knowing when to cut your loss is not good in the long run. What's your name?

Paul ~ happy to have you.

Debbie ~ glad to be able to help. Good luck with SS>

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