Snap Shot look at Short Sales

There is some great issues with banks and learning the systems of "Short Sales" but over the last year. The banks have not been willing to work with the consumers. The banks are not willing to be timely with the getting information to the new buyers. The banks are not willing to work with in a timely manor with the sellers.

Studies have shown that it costs the bank more money if a property was foreclosed upon than if they accepted a 'short sale'. For homeowners, a 'short sale' makes much more sense for several reasons:
1- There is a much higher chance that the deficiency judgment could be negotiated in a short sale versus a foreclosure.
2- A short sale would have less of a negative impact on the homeowner's credit rating.
3- The homeowner would have at least some control over the timing of their relocation to new living arrangements.
4- A 'short sale' would allow the homeowner to leave with dignity.
5- It does not leave a house vacant for a year or more and bring other bank owned homes value down due to condition of subject property.
6- And Finally it just makes sense ( Banks don’t get it)

In the past, the banks used to process the loan (take the application, put together the file, etc.), lend you the money, and service the loan (send the bills, make collection calls, follow-up, etc.).

Over the last eight to ten years, the lending of mortgage money has shifted. First Wall Street and then the federal government became the primary lender in the mortgage sector. But, neither Wall Street nor the government had any interest in processing or servicing the mortgage. Mortgage companies continued to process the loans, but a new industry was created to fill the need for the servicing of these loans. So now, a separate and independent entity is servicing a tremendous portion of existing mortgages.

Just ten years ago, 37.4 percent of all mortgage loans were securitized (thus requiring a servicing company). Today, that number is 79.3 percent. Servicing companies actually collected more fees for a foreclosure than they did for a 'short sale'. Actually, the servicing company would lose money if they did a 'short sale'.

The federal government realizing that modifications were not the answer and banks realizing that the foreclosure process was too expensive, have agreed to change the fee structure to make it more profitable for the servicing companies to lean toward 'short sales'

Now knowing that information the process for short sales over the last 6 months to a year have become easier on everyone with one exception. While the process is easier, the volume has increased to the point that customer service has been thrown out the window and time of the essence is not spoken of.

My advice:
1- If you are in the need of a short sale, contact someone locally to help you through the process ( Loss Mitigation Specialist or an attorney). I can recommend someone to you if you need that assistance.

2- If you are interested in purchasing a Short Sale home, understand the process and understand it takes time and 85% of the time the delays are not the agents, or sellers fault. However, work with an agent that has done these type of transaction before. I can recommend someone to you if you need that assistance.