Short Sales cannot proceed unless Lenders cooperate with Buyers

By
Real Estate Broker/Owner with Lazarus Realty
Lazarus Realty
Lazarus

Direct:
Fax:

559.301.1647
559.438.7475

1319 W Bullard #4 -- Fresno CA -- 93711
 
 









Short Sales cannot proceed unless Lenders cooperate with Buyers

 

...and their agents. In a previous blog I gave an example of an offer that I made on behalf of an investor on a Short Sale. It was an ALL CASH OFFER that was rejected by the lender. A few months later after the home went through foreclosure the home was listed at LESS THAN THE CASH OFFER and probably went into escrow for substantially less than the list price. About 5 weeks ago I made another offer on a Short Sale and to date have not received an answer back from the agent. Other agents I have spoken with have the same stories. Once again, as a reminder, out of the HUNDREDS of Short Sale listings in the Fresno MLS last year there were only 46 closings.

I say all of this as a preface to a news article I just read titled: Lenders pledge speedy response on loan help according to the article lenders are saying they will let strapped sellers know whether or not they are approved for help within 45 days. Well I'll believe it when I see it. Personally, I would discourage ANYONE from even bothering to with a short sale. Simply too much hassle and scant prospects of producing fruitful results. And if you happen to be reading this blog because you're considering a Short Sale and your plan is to sell your home to a relative at a huge discount to what you paid so you can buy it back cheaper: FORGET ABOUT IT! It doesnt work. But hey, dontl isten to me - besides because I'm certain you wont have a problem finding a Realtor® who is willing to try and get such a deal done.

©Randy "Lazarus" McAtee

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Location:
California Fresno County
Tags:
fresno
short sales
foreclosures
reos

Spam prevention
Show All Comments
Rainer
61,374
Lisa Lambert
The Law Offices of Elisabeth A. Lambert - Fresno, CA
Esq. 1031 Exchange Expert

Lazarus:

Welcome back!!! It's been far too long since you posted. We've missed you.

It will be interesting to see whether the lenders actually follow through on this pledge. I don't think they have the staff or expertise.

Lisa

Jun 19, 2008 10:16 AM #1
Rainer
117,621
Bob Volanti
Keller Williams Realty Fresno - Clovis, CA
Fresno and Clovis, CA Realtor

Welcome back Randy,

Ironic that you should write this now as just after reading it I got a call from someone wondering what to do with their house that their about to be foreclosed on. Asking if I could list it as a short sale ? Don't think so. Wouldn't want to. Very sticky, time consuming, and most often not productive.

Then again, I'd bet plenty of folks would list it and ask questions later only to be frustrated like you've been.

I've heard that lenders would rather go to foreclosure due to PMI, in some cases. Not sure about that, but I am sure Lisa's right. You've been away many days too long! Good luck.

Jun 19, 2008 11:21 AM #2
Anonymous
Brian Kurtz

It seems that you've got a short sale "sour taste" left in your mouth.  I've talked with more than a handful of Realtors in the last 5 weeks that have spilled similar stories.  Banks not willing to accept offers without apparent reasoning to bank up the call.

Unfortunately, there are two causes for short sale failures.

1) Wrong Lender - Lenders like EMC, ASC, Chase, HomEq, National City, and First Franklin are known for having speedier processes and faster response times.  Lenders like Wells, WaMu, any of the Citis, and a few others are known for providing poor discounts.

ANY lender that is servicing a Fannie/Freddie backed loan will be trouble.  Fannie/Freddie products are set in stone with a requirement that the bank must net 90% of the BPO or the deal is denied.  This leaves JUST enough flex to cover a full price offer and closing costs, but no concessions or any type of discount.  Unfortunately, when brining on a short sale, there is no way to know if it's Fannie/Freddie backed or not.

2) Wrong Agent - the average real estate agent is NOT a rabid pit bull negotiator that has a bag of tricks up his sleave that he can put into force against the lender to continue to pound the lender into submission.  This isn't THAT big of a deal because most short sale negotiations don't need to be that intense.  A lack of understanding of the short sale process and a number of other factors (plus plain laziness) cause short sale deals to die on the vine.  One of the major ones is not submitting a COMPLETE and professional short sale package.

As to the whole "rent back from a family member" thing...I just finished a video episode up on this very topic for The Short Sale Show.  It should be available on Saturday at http://www.ShortSaleShow.com

Jun 19, 2008 02:30 PM #3
Ambassador
448,548
Deb Brooks
Brooks Prime Properties Wichita Falls Texas - Wichita Falls, TX

Hi Randy, I agree with you about our state of affairs. The short sale is no different. If we can convince the lender that he is better off one way or another they will listen. Later in the rain~Deb

Jun 19, 2008 02:53 PM #4
Ambassador
448,548
Deb Brooks
Brooks Prime Properties Wichita Falls Texas - Wichita Falls, TX

P.S. Rent backs are like knives in the lenders back. Get a grip. Later in the rain~Deb

Jun 19, 2008 02:54 PM #5
Rainmaker
79,032
Randy "Lazarus" McAtee
Lazarus Realty - Fresno, CA
Owner/Broker, Lazarus Realty, Fresno California

Lisa - Bob - thanks for the warm welcome back!

Jun 23, 2008 08:36 AM #6
Rainer
61,374
Lisa Lambert
The Law Offices of Elisabeth A. Lambert - Fresno, CA
Esq. 1031 Exchange Expert

Hey,

I thought readers of this post might be interested in a recent post outlining the differences of the Mortgage Debt Forgiveness Relief Act and state anti-deficiency laws.

Lisa

Jun 26, 2008 10:20 AM #7
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
79,032

Randy "Lazarus" McAtee

Owner/Broker, Lazarus Realty, Fresno California
Ask me a question
*
*
*
*

Additional Information