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Lenders Responding to Short-Sales

Why do Banks say they want to help troubled homeowners? but they delay the buyer that could save the Seller and the Lender themselves.

Lenders are taking much longer to react, respond - anything, Give us a "Yes" or a "No'. I have offers in on properties and still I am waiting for responses. I had a response on a property we had an offer on three months ago and the response was Yes. Guess what? My client had already moved into a new home.

What is a short sale? Basically - homeowner who cannot keep up with their loan asks the lender can they sell their home for less than what is owed on the home's mortgage, and forgive the balance of the unpaid debt.

So if a borrower has a mortgage balance of $450,000 and finds a buyer who will pay $400,000 , the lender then agrees on $400,000 and guess what? Happy Seller, Happy Buyer and Happy Lender.

In a Short-Sale, everyone wins. Sellers avoid foreclosure which destroys their credit, and lenders recoup more of their costs instead of trying to evict an owner and then sell the property.

Do we not have a fiduciary responsibility to our buyer clients, who come to us wanting a better property in a buyers market for a killer price, and less hassle. Are short sales working against getting a bargain... ??? Are lenders in denial ... ???

What concerns me more is do Agents really know what they are doing in a short sale..??? Over half that I have dealt with tell me that sending in the HARDSHIP PACKAGE IS NOT DONE UNTIL THEY GET AN OFFER. Are you kidding me.

Make sure when your clients do make an offer on a Short Sale that you still preview other homes out there. DO NOT WAIT.

Lenders Responding to Short-Sales

Posted by Patrick Canavan - Orange County Real Estate Voice on 06/22/2008 12:19 PM

Comments (10)

real estate, buyers

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10 Comments on Lenders Responding to Short-Sales

JUN

2008

We have a few listings that will be short sales, if we ever get an offer and if the lender will deal. Seems like most agents and buyers are staying away from short sale listings in our area, plenty of already foreclosed on homes to pick from without the endless wait. I have one question for you. The lenders have told us that they will not look at the short sale proposal or accept any paperwork until and unless we have an offer. That would put us in the over half that you are referring to. If you know of a way around this, please share.

It seems that the lender does not have their best interest in mind or that of the client by taking so long to response. I, too, have offer in on properties only to be told that the client does not live in the property so they will not do the short sale.

Couldn't agree more Patrick!!! I just had what I would consider a "good" short sale experience relatively speaking. Got the offer, sent to the lender complete (hardship package was sent as soon as we lowered the price to short sale status). Who waits to send THAT in??? Anyway, I stayed in contact with the lender and the agent every 2 days. Finally when I got approval, I called the agent who said, "Let me see if my clients still want it." Ugh!!! Of course they didn't but I had another agent show it and ask if we were still accepting offers. "Of Course We Are!!"

To make a short sale story long, The lender approved the 2nd offer the next day!!! This has to be the luckiest short sale buyer ever!!

Patrick - I've dealt with a few and heard other horror stories about short sales. I'm not sure of the immediate answer, but the process needs to be looked at and streamlined to ensure these properties don't sit idle for any longer than they have too.

Hi Beth,

It is difficult alright for listing agents to get the right people to talk with or people who know what there doing in the banks.

The seller contacts the Bank and requests the paper work or the hardship package. They will complete the package and send it back. I am not sure how it is like in Michigan.

Great question Beth.

Hi Taylor,

For some reason it just gets more complicated to buy homes. Hmmmm

Hi David,

Nice. There are some success stories but the over all picture. NIGHTMARE

Hi Jason,

You are right. The only way I see it, is for the banks to create departments that only handle short-sales and stop piling on paper work to people who have never done short-sales before. The banks need experienced employees.

PATRICK, I have successfully done two and I personally think they should be called LONG SALES not short sales.

JUN

2008

I can't agree with you more Marchel.

Regarding your comment about wondering whether agents know what they're doing in a short sale, it's true that many don't. It's a relatively new market and lenders can be hard to negotiate with, especially when they haven't entirely figured out what they want to do. Anyway, I work for a company where we actually handle the short sale negotiation aspect while handing off the listing duties to an agent. It works pretty well because the agent doesn't have to figure out how to work with the lender and they can focus on what they do best, which is selling the home.

Hi Nick,

Thanks for your comment.

Adding more confusion to the mix is what I have experienced, Nick. So, "an agent lists a Home as a Short-Sale and says to the seller I have never had experience doing Short-Sales but I will employ another Company who will do the work, that they should be doing, and pay them $$$?

How long has the company your working for been in business doing short-sales? Where is the Company? What are your Fees?

Are you a Realtor / Agent / Broker / LO?

A Realtor should not list a Home if they do not know what they are doing. How are they going to explain what they do not know to their clients. That listing should be passed on to an expirenced Realtor as a Referral who has had expirence and has had success in selling short-sales.

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