13 Absurdities of Short Sales
At our Keller Williams annual convention I had the pleasure of attending a panel on Short Sales that included Edward Goldfarb, a KW colleague in Florida who is a short sale expert. He shared with us a white paper on the absurd current situation regarding short sales, including these 13 absurdities:
- Homes must be sold over and over because the banks, investors and MI companies take so long to approve the Short Sale that the first, second, third or even more buyers walked away in desperation.
- After taking months for Short Sale negotiations, the banks will foreclose on a home only to turn it over to the REO brokers who sells the home within days for thousands less than the Short Sale price previously offered. Again, costing the taxpayer or lender’s stockholders wasted billions.
- In the middle of negotiations, the second mortgage is sold or assigned to an <impossible to deal with> collection agency that extorts thousands more than the $3000 government guideline to release the lien.
- Lenders ignore the buyers FHA/VA appraisal and kill the deal or take weeks/months renegotiating.
- Lenders stall the deal for months only to tell you the file has been closed and the Short Sale package has to be resubmitted.
- Short Sale approvals often do not give enough time for the mortgage company to fund the loan. Extensions are begged for and can take weeks or even a month or two.
- Short Sales require months and long hours to be worked only to have the lender cut hard earned commissions and fees when the Short Sale is finally approved.
- Lenders give an approved price and then renege.
- Many times a Short Sale approval is good for only 30 days or less to close an FHA/VA sale that under the best of circumstances takes 45 days.
- Lenders often give short notice and impossible deadlines to meet for document re-submission.
- Broker Price Opinion and appraisals come in way above fair market value and it takes weeks of fighting with the bank to get a new evaluation.
- The lender/servicer has taken so long reviewing the file that all the documents (hardship letter, financial worksheets, bank statements, pay stubs) become obsolete and require updating so the docs all have to be resubmitted two, three and four or more times over months.
- Vacant homes needlessly deteriorate (costing thousands of dollars in value) while the lender does nothing to expedite the short sale approval.
Why do they call these SHORT SALES? I believe they should re-name them CHALLENGING SALES!