I was at REOMAC last week and in one of the panel discussions, a question was raised about why the banks / lenders have so completely failed to be responsive on short sales. Why is it that the bank will refuse multiple offers at a given price but then accept $50,000 - 100,000 less (or worse) once the property turns into a foreclosure.
The only response came from Rick Sharga of RealtyTrac. He indicated that it had to do with accounting practices and not common sense. It is my interpretation that the existing practices had allowed an asset to maintain some "face value" such that the asset still looks valuable on the books and accepting a short sale would diminish the perceived accounting value - at least until the asset was removed from one set of books and was added to some other, where it eventually gets foreclosed upon. Rick said that going to the "Mark to Market" accounting practice would reduce this problem. I imagine this is because the asset would always be marked to its true value (give or take) such that there is no incentive to maintain falsely inflated books and deny a short sale.
If anyone can add further clarity to the issue, that would be appreciated.
Robert T. Boyer, Ph.D. San Diego's Finest Real Estate RobertBoyer.Realtor@gmail.com |
Robert T. Boyer, Ph.D. Your San Diego CA Real Estate Connection! San Diego Foreclosures and Real Estate Investments Centrally located in Carmel Valley Serving North County San Diego Real Estate including: La Jolla, Del Mar, Carmel Valley, Rancho Santa Fe, Solana Beach, Cardiff by the Sea, Encinitas, Leucadia, Carlsbad, Oceanside, Vista, San Marcos, Escondido, Rancho Bernardo, Poway, Rancho Penasquitos, Scripps Ranch, Tierra Santa, Mira Mesa, University City |
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