BANK OF AMERICA AND SHORT SALES - THEY DO UNDERSTAND - WATCH WHAT THEY DO, NOT WHAT THEY SAY.

Reblogger
Real Estate Broker/Owner with South Florida Real Estate & Development, Inc. BK3027955

Short Sales are not for the faint of heart - it takes the experienced agent to complete a short sale - from start to finish - period!

Original content by Lenn Harley 303829;0225082372

WHAT DO SHORT SALES OFFER THE BANKS??

MYTH #1.  IF IT MAKES SENSE TO THE AGENT, IT SHOULD MAKE SENSE TO THE BANK.  ActiveRain members continue to question the results of Short Sales submitted to major banks, servicing entities, etc., for approval.  The question is usually "why don't the banks understand the benefits of approving a Short Sale??"  Lenn Harley

MYTH #2.  THE BANKS DON'T UNDERSTAND THE BENEFITS OF APPROVING A SHORT SALE.  HA!  Bank of America understands Short Sales far better than real estate agents and consumers understand the Bank of America.

MYTH #3.  IT'S GOOD PUBLIC RELATIONS FOR THE BANK TO APPROVE SHORT SALES.  They, the Bank of America, will know exactly what they are doing and have made a management decision to use Short Sales as an instrument for public relations.  Public relations not necessarily to enhance their image with the "public", but to satisfy any inquiry that may originate from any regulators that would question the Bank of America's

MYTH #4.  THE BANKS MUST FOLLOW THE GUIDELINES FOR SHORT SALES.  HA!  What guidelines??   

MYTH #5.  THE NET TO THE BANK MAY BE MORE THAN WITH A FORECLOSURE.  That does not mean that they intend to approve a large number of Short Sales.  They do not.  They do not have to in order to achieve their goal.  A few selected anecdotes is all they need to perpetuate the myth that the Bank of America may approve large numbers of Short Sales. 

MYTH #6.  THE BANK WILL APPROVE THE SHORT SALE IF THE OWNER HAS A "HARDSHIP".  The only thing "short" about the Bank of America policy on Short Sales is the "short sighted" frame of reference on the part of agents and the consumers whom they advise.  Too often, agents believe that the bank is going to follow the same logic used by the agent in evaluating a property for Short Sale.  We focus on market value, seller hardship, benefits to the seller, the agent and the buyer.  However, agents have no inside knowledge of the bank's relationship with FDIC, FannieMae, FHA, VA, investors, etc. when computing the net to the bank from a Short Sale vs. Foreclosure

SEE:  BofA still not understanding Short Sales

SHORT SALES ARE NOT INSTITUTIONALIZED.  Don't forget.  The foreclosure processes have been in place within these financial institutions for about 200 years.  The relatively new and ever growing systems to process Short Sales is, for many banks only 2-3 years old.  Banks have powerful lobbies that have institutionalized the foreclosure process for the benefit of the bank.  There hasn't been enough time for the bank lobbies to get laws on the books to give the banks the same advantage in Short Sales that they have with foreclosures.  Without the structure to protect the banks, they are in uncharted waters and not able to move swiftly or routinely when presented with a Short Sale offer. 

SHORT SALE VS. FORECLOSURE.  Banks have protections in foreclosure that they do not have in Short Sales, i.e., Mortgage Insurance, Loan guarantees, equity, etc. 

FORECLOSURE IS EASIER FOR THE BANK.  With a Short Sale, the bank usually must deal with 2 agents, a buyer and a seller.  With a foreclosure sale, the bank has eliminated the seller/owner from the mix. 

What do Short Sales offer the banks?  

Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988.


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Comments (3)

Terry McCarley
Coastal Real Estate - Cape Coral FL - Cape Coral, FL
REALTOR, SRES, CDPE - Cape Coral, FL

I handle alot of short sales and I run into agents all the time trying to do them without knowing how to.  I get very irritated with agents that list a short sale when they have never done one.  They need to train under an agent experienced in short sales prior to attempting to do them on their own.  If they don't want to be trained they should refer them out to an agent that has the experience to get the job done and get it done right.

Jul 07, 2010 03:48 AM
Janet Sebile
Coldwell Banker Apex, Realtors - Rowlett, TX

You better know that banks are very clear on what they are doing.  A lot of it is their strategy to get more money and they design their systems to do so.  Terry, you are right, you need experience and if you haven't done a short sale before - don't go it alone.  It's not worth it.  Think of your client.

Jul 07, 2010 05:32 AM
Damon Gettier
Damon Gettier & Associates, REALTORS- Roanoke Va Short Sale Expert - Roanoke, VA
Broker/Owner ABRM, GRI, CDPE

Lenn makes some good points about short sales.

Jul 07, 2010 09:38 AM