What do you think is the most frequently asked question about short sales?
While I have not surveyed all of the Realtors® and underwater borrowers throughout the nation and I am not claiming that my data is exact, I can say that this week I was asked the same question several times. And… that question is:
How long will it take to get my short sale approved?
Well, I am not Nostradamus, and I do not have a crystal ball. I do not even own one of those Magic 8 Balls that were popular about 30 years back. And, for all of these reasons, I cannot predict how long it will take to obtain short sale approval.
However, if you tell me who the lien holders are, I can tell you what my experiences have been with those lien holders. For example, if you tell me that you have one mortgage and it is held by Bank of America, I can tell you that the Equator system is fairly efficient and an approval can come in as little as 3-4 weeks. However, if you are being evaluated for the HAFA program through Bank of America, that could slow things down. Also, if you have a second lien with another institution and this institution requires approval from the first lien holder before moving forward, this will also slow things down quite a bit.
There are various factors that help to determine the velocity in which a short sale can be approved. They include (but are not limited to) the number of liens, the number of servicers involved in the negotiations, the quality of the individual employee working the file, and the efficiency of the lending institutions.
Of course, if you are the one who is asking this question, keep in mind that banks are not required to approve a short sale. However, in most cases, it is in their best interest to do so.
So, the next time you email me or phone me and ask how long it is going to take to get your short sale approved, know that I cannot pull a rabbit out of a hat (unless it is already there). I will ask you a number of questions. Based on your responses, I will make my best guess based on my experience. And, I’m sorry folks but that is the best that I can do—unless I get a crystal ball for Christmas.
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