Admin

Many Reasons Why Lenders Should Jump on Short Sales

By
Real Estate Agent with Coldwell Banker West Shell

This morning's Wall Street Journal had an interesting article on "Why Lenders Are Leery of Short Sales". Newspapers in black and white

In articles posted to "thecincyblog" I have tried to educate consumers on: "Crucial Sort Sale Advice for the Greater Cincinnati Area", "Foreclosure Assistance", "How To Understand The Mortgage Mess" and "4 Truths About the Subprime Bailout". And while the article in the Wall Street Journal fairly represents the lender's point of view, I think it fails to address the failure of mortgage servicers and their investors to look at the "big picture" and act accordingly.

3 reasons Lenders should jump at short sales are:

  1. A bird in the hand is worth- what? Lenders who stall on short sales and ultimately lose the buyer(s) are not only losing money they are losing equity. The National Association of Realtors as well as any realtor will provide you with statistics indicating the longer a property remains on the market the lower the selling price.
  2. Empty properties cost the investors more than occupied properties. Homes that fail to complete the transaction during the "short sale" period may end up as vacant properties. As a former relocation company employee, I can tell you that empty homes are expensive to maintain and give birth to a host of problems which may be costly to repair.
  3. The short sale you ignore may impact other nearby properties that your investors currently "own".

As an investor I am always reminded to cut my losses and move on- perhaps these investors should heed the same advice.

The servicing companies need to leverage the eyes, ears and noses on the ground. Many real estate brokerages have departments/ groups/individuals who are equipped to handle vacant and or damaged properties. Keeping the property in good shape will aid in a future sale and may provide the "neutral" resource to determine value. Finally, the second mortgage/home equity investors need an incentive to stop holding "short sale" contracts hostage to 100% recovery of their investment. Many mortgage holders are willing to negotiate a reasonable deal only to have the contract fall apart due to 2nd (and in some cases 3rd, 4th...) lien holders balk at any deals. What do you think about the current mortgage situation? For more information call 513-300-4090 or send an email.