Suit against Loan Servicers for Short Sales Gone Bad...

Real Estate Broker/Owner with Bauer-Reno & Associates Real Estate LLC

By this point, most of us real estate agents have been involved in a short sale that failed to close as a result of the loan servicer’s loss mitigation delays only to see the house sit and rot for 6 months to a year as an REO and watch the bank net $50,000 less than our short sale offer a year prior. The more I witness this phenomenon, the more questions come to mind. Can the servicer be held liable for not appropriately handling short sales? As a mortgage investor, I would be pretty upset to learn I lost $50,000 because the servicer was under staffed and not able to close my short sale. Can the servicer be held liable for lost commissions? Granted the listing contract is between the broker and the seller, but if the servicer drops the ball and their inaction results in the contract not being satisfied…shouldn’t there be some recourse for the parties involved? I think if the mortgage investors started legally pursuing some of the less attentive loan services we might see things speed up a bit. Until then, I guess its back to the phone to convince some loss mitigator that it is a good idea to save $50,000 and take my offer.

Comments (1)

Lester Wilkins
Blue Water Home Loans NMLS# 166527 - Port Huron, MI

Great post.  Short sales frustrate all involved.  It is sad, but they are likely here for a while.

Oct 02, 2009 03:47 AM