I have a customer that I am working with on a short sale. The property is a definite starter home but more is owed against it than it more than the offer. The offer is the maximum the client is able to pay for the property and qualify for the loan at current interest rates. The property has had no offers to purchase, one of the reasons is that it is in a flood zone so there is extra cost for the flood insurance. So it isn't a case of someone trying to steal it just to get a good deal. It is a case of making a reasonable offer for a property based on ability to pay for it and marketability.
All pretty straight forward, isn't it? Well, the offer went into the bank before Thanksgiving. So that means we are over 6 weeks from the offer date. Knowing that the acceptance of the offer would not be quick, being an intelligent loan officer, I locked the rate (to make sure she would still qualify for the loan after we got the accepted offer) for 60 days. Obviously, in hindsight, not long enough get the loan done.
Today, after constant requests for status by both the listing and selling Realtors, we got the answer from the bank holding the note. The answer, "We are backed up and it will be at least another six weeks before we have an answer." Now, that is just asinine. Don't they know that the unemployment rate is 7.2%. Hire more people. That does two things, it gets things done at the bank and lowers the unemployment rate. A win-win situation.
Needless to say, my client is out looking at other property and when and if, the bank makes up their mind, she will be long gone. Stupid is as stupid does. Another chalk up to the inefficiency of the
Short Sale marketplace. I have to ask, is this a way to keep worthless paper on the books as a viable asset instead of taking the write down generated from the sale? Why would they take so long to decide if it was the right thing to do?