Bellevue WA – We at the Stop Foreclosure Institute receive emails all the time that go something like this “The Bank’s Short Sale Problems are not that simple. A bank can’t afford to write off too much loss at once. Also, their investors may not approve the short sale, because they can’t afford to write off too much loss at once either. And the circle goes on.”
Click here to discover how other sellers successfully did a short sale and avoided foreclosure.
Here is why this flawed assumption is incorrect. Most of the large, national banks do not own the mortgages they handle. As an example, Bank of America does not own 80% of the mortgages they service. The biggest holders are the GSEs: Fannie Mae, Freddie Mac, and Ginnie Mae. These entities are accustomed to losses. The other entity that’s set up well and accustomed to losses is FHA. Most of the remaining loans are owned by Wall Street Firms, Pension Funds, and other professional investors. Most of the loans owned by them have already been written down in value dramatically. In a few, isolated instances, the “We don’t want to write off losses to fast because it will hurt this quarter’s earnings” thing applies. But, it is also illegal because of accounting rules. Click here to continue reading.