By now everybody knows that the banks are overloaded with short sale requests and foreclosures. So why is that they don't hire enough people to handle the workload, so they can get these bad loans off of their books. This is a straight forward question to a very sordid answer.
For the companies who have made attempts at filling the cubicles with new help it only creates a whole other dimension of problems. Now you have people with a week or two of training but no real work experience making the decisions as to how to handle their workload or what to look for in a short sale candidate. Many of these people quit within the first month which is why you may find your short sale dealt to another rep several times over only to end up on the bottom of someone else's files. How many deals have you done that have had more than one negotiator and it was not in the banks master plan.
Most banks are likely the servicer and not the debt holder. They bought the rights to service the loan and not the note itself. Servicers handle everything from taking payments for the investor to modifying the loans and short sale negotiations. They are merely the middle man between you and the investor but, are authorized in most cases to operate on their behalf. Much the same as a short sale company will do it for the real estate agent and /or a seller.
Many of these companies get paid the same in this phase whether it sells short or is foreclosed. This is a contractual obligation that is strictly enforced. A good example of a contractual backlash is countrywide. They were recently sued by a hedge fund for not following the agreed servicing standards. This included modifying ailing loans and short selling or foreclosing on the bad loans.
foreclosure is less work on the front end but costs the investor more once it goes to the attorney. When it gets foreclosed there is more money to be made by the servicer. Unless their contract takes it out of their hands, then the investor will find another servicer to handle it for them. So, from the servicer's standpoint, they really don't care that much if it sells short or not. its the investor thats losing. (and the rest of America).
Once it gets foreclosed the servicer and attorney's make even more money! Now that they are in more familiar territory with systems in place (more or less) they'll take this loan for what its worth until an REO agent sells it for them. And Yes, many of these companies will get bonuses on certain aspects of the contract. Only they know which. And yes, some get paid by commission as well.
So what about your deal? 3 months and still can't get a call from the bank? Does the bank even care? If they do, doe the rep assigned to it care? What about the investors? Do they have mortgage insurnce and don't care? Is the MI company in a position to OK or deny a short sale, or are they at the mercy of the investor who could care less? How about the hedge funds? Another wall street gaff that just greedily packaged bad debt to make more money. How are these investors taking it?
This is only the tip of the iceberg as to the problems that consume the short sale process. The banks and the companies who represent them are about money and the contracts that are in place do not allow for the losses that we are seeing. The servicers are doing pretty well so why change their terms mid stream and put their profit in jeopardy? (rhetorical of course) It's the Mi companies, GSE's, Investors, hedge funds and everyone else that is paying the price. If you have anything to add, please do so as this is only what is on my mind while I'm writing this.