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SHORT SALES: Congressional call to action!

By
Real Estate Agent with Windermere Bay Area Properties

Fellow REALTORS and industry leaders, please help!

We need SHORT SALE REFORM NOW!  Our banks and servicers are being strangled by their investor guidelines.   We need to jump into action together!  We need to write to our law makers - locally, statewide and nationally - to let them know they must aid in the reform of the Short Sale process.

Homeowners are left in agony when short sales are seemingly arbitrarily denied.  Or a small $$ difference closes the file.  Or a cash contribution requested is impossible.  Worst is the MONTHS it takes to get an answer from most major lenders, only to be told they will now turn your deficiency balance to a collectable debt!  Their systems are broken. Contact with anyone above a clerk level is almost impossible and they are overwhelmed, in part, due to their own ineptness (I mean how many times can you lose the same document?) ENOUGH IS ENOUGH!  Bank of America and Countrywide are two of the WORST offenders! 

Banks make decisions in these short sales that make NO business sense!  These banks ask for impossible terms from their borrowers when in a foreclosure, these same borrowers would walk scot free!  These sellers are very often not even treated with respect from the same banks who gave them the loan in the first place!  These people in many cases are losing everything - and they are up against the impossible to do the "right thing."  If banks would rather just foreclose, please just let us all know so we stop even trying!

I saw just today a blog featured on the Active Rain main page saying to stay away from Short Sales!  The moratorium is going to be lifted on foreclosures soon, and soon these short sales will be competing against even MORE REO's. 

I can track several of my files from the failure of a short sale to the foreclosure and ultimate sale which led to losses of 50k or 100k or MORE for these banks. IT MAKES NO SENSE!

ESPECIALLY for these banks who have benefitted from our tax payer dollars... they are not helping their borrowers and worse, they are contributing to bigger losses for themselves, and in some cases, larger liabilities for deficiency and taxes for their borrowers.  There are class action lawsuits forming.  There will be lawsuits looming.

Banks should be held to a strict , across the board standard of approving short sales.

One major bank, Wachovia, has taken all their portfolio loans and streamlined the process. They're keeping it local, they're approving within a week and we can close in 30 days.  THEY KNOW the losses to their bank will be much greater with a foreclosure - especially in this time of unprecedented decline of values month over month.  Use them as a model! 

PLEASE! Write to your legislators NOW.  Ask your clients to do it.  Tell them they must STREAMLINE the short sale approval process.  Give these banks and servicers permission to ignore investor guidelines in some cases as long as certain basic criteria are met!  Offer the same tax advantages offered as a foreclosure to the write off of bad debt of a short sale.

HELP HOMEOWNERS NOW.  They want to do the right thing!  They want to avoid foreclosure!  They want to buy a house sooner than would be allowed in a foreclosure!  They want to maintain their credit score as much as possible!  They want to help the bank minimize their losses!

BANKS!  Treat short sales like an REO.  Get us a value with a BPO.  Tell us what is acceptable and we'll sell them!!   Let's turn over this short sale inventory as quickly as the REO inventory is selling and we'll be able to turn our housing market around.  There are buyers who want these short sales, but they are not willing to wait the MONTHS it takes for these banks to make decisions.  Sellers need to be rewarded for keeping the liablity on themselves, keeping the maintenance up, doing all the disclosures and aiding the bank in minimizing their losses.  Plus it keeps our neighborhoods cleaner, more stable and in the longer term values up!  Sell now in a short sale vs. months from now in a messy foreclosure!

DO IT PEOPLE!  Please:

http://www.congress.org

You can look up your local, statewide and national lawmakers on the site above.  You can even write a letter to them right on the site, and print and mail, or for a small fee send thru the site and write on the soapbox to get other people involved too!

We can turn this market around if only we could sell the inventory!  Have you had enough?? I have!

 

Comments (5)

Mike Russell
Mike Russell Real Estate Group - Overland Park, KS
Overland Park Kansas Real Estate

the biggest problem on short sales is information. both between the bank and the Listing agent and the bank between it's own departments. You can be getting final approval on a short sale and meanwhile they are also finalizing the foreclosure ast the same time. You end up sending in the contract seven different times because the person on the phone can't find it again and wants you to resend it and wait 72 hours to call back in. or they lose you agent authorization letter and won't talk to you.

Some software maker needs to design a program to keep everyone in the loop. instead of calling I can go to the website and see

Contract received

BPO ordered /received

appraisal ordered

primary approval

waiting on ?

etc.. etc...

Mar 19, 2009 03:54 AM
John Secor
EXIT Real Estate Results - Winter Springs, FL

Excellent rant Catherine!  Bofa and Countrywide should be forced to step up to the plate by stream lining the short sale process.  I have contacted my representatives in Washington, hopefully others will as well.

Mar 19, 2009 04:07 AM
Christopher Lotte
Lottes of Leads - Columbus, OH

Great post!... The agents I work with here in Columbus are running into all of those problems you mentioned above... Part of the problem could be the short sale departments are so overwhelmed right now that they can't properly service the short sales...

Mar 19, 2009 04:11 AM
Catherine Myers
Windermere Bay Area Properties - Walnut Creek, CA
Walnut Creek, CA Real Estate

Michael, you're right. Their systems don't work. I just spent 4 days of trying to get a fax to get into Chase.  Tried at midnight (fax didn't answer) tried at noon (busy signal), tried at various times and many many times and redials and FINALLY after 4 days, it went thru at 9am this morning! 

John.  I should've called it the "rant to action" because everyday i'm reminded just how ridiculous this whole system is.  It seems set up for these short sales to fail and when companies send out 19,000 short sale denial letters in "error" you have to start to wonder about "conspiracy theories" (which I never did before this market btw!)

Christopher.. yes, you're right, that's why I'm very glad about Wachovia.. bringing it local, setting up regional teams and they actually pay their people on performance - like us - so they have a vested interest in seeing it closed too!

Mar 19, 2009 04:22 AM
Melissa Zavala
Broadpoint Properties - Escondido, CA
Broker, Escondido Real Estate, San Diego County

That is quite a rant! I do agree with much of what you say. But . . . what can congress do to control a private investor? Banks are getting much easier to work with on short sales; they just have too many files.

Apr 06, 2009 04:49 AM