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Short Sales Are The Solution For The US Recovery

By
Real Estate Agent with Coach Realtors

I received word today that the 1st lender on a short sale transaction (involving 2 lenders) that we are negotiating, wants the buyer to increase their purchase price a second time since entering into contract on this home. The bank says they need at least $35,000 more. Or what? They won't sell the house? They'll move forward and foreclose? How does that make any sense! We have a ready, willing and able purchaser, a seller who is maintaining the home and cooperating in every way they can and a bank that is stomping its feet saying they want more. In the scheme of things, the additional money the bank is seeking is peanuts. It defies rhyme or reason.

I am amazed at the disconnect between what we (Realtors, Attorneys, Mortgage Reps, Title Reps, etc.) are trying to do on the ground level to move the languished distressed inventory and the banking industry is doing sitting behind their online systems reviewing spreadsheets making decisions that affect people's lives and whole communities. It is totally within the banking industry's power to raise the collective moral of our country and begin the healing process of our severely damaged economy. Take the short sale!!

Everyone will agree that there is plenty of pain to go around in these circumstances. Homeowners whose equity has been totally wiped out. Creditworthiness that has been annihilated. Banks have had to write off tremendous amounts of unrecoverable debt. Its a mess out there but if we really analyze the situation, short sale offers the best case scenario in most circumstances. The seller gets to sell the home with some dignity, avoiding foreclosure, and less damage to their credit than foreclosure would cause. The bank gets to recover more of the outstanding debt than a foreclosure would ever bring plus they never have to take the property into inventory thus saving considerable costs and resources. And the community is saved from the inevitable scarring that occurs when foreclosure takes place; property values are maintained at a higher level and, in most cases, the character and atmosphere of the neighborhood is spared.

So if short sales are a better solution to what ails our country today, why aren't more of them successful? I believe every short sale should be approved! Why not? The banks aren't making enough money? I've seen distressed properties where mortgage payments are in arrears as much as two years or more and still that loan can be sold and a profit turned. How can that happen?? The banking industry profited obscenely by the American consumer one hundred times over in the past 10 years. Why is it that the consumer is bearing more of the brunt of our economic condition than the banking industry? More pressure needs to be placed on the banking industry to 'make it work'! Cut your losses and let's move on! Please!

I apologize for the soap-boxing but I've seen too many people (consumers) hurt by the decisions of banks where profit is the #1 concern. Keep it up and there won't be any depositors to fill your coffers or creditworthy consumers to borrow your mortgage, auto, college or business loans. Don't bite the hand that feeds you!

Posted by

Mary Alice Ruppert

Licensed Associate Broker

Comments (1)

John Pusa
Glendale, CA

Mary - Thank you for sharing detailed quality information on short sales are the solution for the US recovery.

Jun 05, 2012 09:33 AM