Conrad:

I would argue that, while the system is far from perfect and even Bank of America would admit this--the bank is coming close to processing one short sale every 20 minutes (just 5 minutes off your estimate). At present, just in California, there are over 500,000 short sale requests pending at B of A alone. Each processor has over 400-600 files on his/her desk to complete each month, and their three phase process--intended to ensure that all documents are available when the negotiator is ready to review the file--takes investigatory time for each property. With an average of only 22 working days each month, and with 400-600 files per negotiator, each is processing about 25 files per day or one every 20 minutes.

It is true that the front end (paper gathering, hardship fact finding, etc.) tasks are completed largely by administrative personnel, but the decisions are made by those with the knowledge to look at a voluminous file of papers, comps, purchase agreements, conditions, lending, loss mitigation, etc., and make a decision in 20 minutes. So if we're calling spades by their name, then we must also admit that the job done by the negotiator is difficult, the outcome is never an easy one to make, and the stacks of papers are never ending.

I do agree that opportunities are lost due to the pace at which most banks process short sales, but I also know that should one be hit by a tsunami (tidal wave) of paperwork, it does take time to dig oneself out from under. Although banks are not yet pubicly stating this, they are gettig closer to acceptable "tolerances" and protocols within the industry. There have been rumors (although I have not been able to verify these) that banks are using a certain "figure" (90 percent of the appraised value has been bandied about) to determine if an offer will be acceptable to the bank or subject to conditions and counters. I've also heard rumors that a market value less than a certain "figure" (60 percent of the loan has been also whispered in the past) will automatically mean that the home is foreclosed since there are benefits to the bank in the form of insurance to compensate for the loss that cannot be bridged by the market price in a short sale. Of course, these are all unsubstantiated, and it would be far better for all concerned if the banks just came out and gave us all more information, but I suspect that because banks are currently the economy's "bad guys", any information regarding homes and foreclosures is likely to be met with the same public acceptance as the national health insurance proposal.

So, yes, I agree they're slower than they should be, but I do not agree that the reason for the delay is based on incompetence of lack of training/experience, but simply just the number of requests. It's not a perfect world, Conrad, and we can only hope that things will get better over time.

Sincerely,
Grace Morioka, SRES, e-Pro
Area Pro Realty

I think you guys are both right. They are the best and brightest... but the whole "overwhelmed pipeline" idea is just rhetoric. They are moving slowly… intentionally. It is not a bandwidth thing... if it was they could bolster their staff within a week. There are lots of people looking for work.

Grace,

While we are being blunt, I feel that if the "brightest and best in real estate, finance, mortgage etc " are at the helm. They should be able to make prompt decisions. It takes 15 minutes to assess the value of a property if you know what you are doing. I can't help but ask that you would call a spade a spade. They are hopeless and have brought upon themselves untold amounts of damage and lost funds. This in turn makes the real estate agent apear in a bad light because we cannot update our clients on the status of a transaction.
There are numerous cases where the bank could have received more for a property....but because of their snail pace, have ended up offloading the distressed assets for considerably yes.
I am sorry but I have been frank and blunt as you have.

Conrad:

Forgive my bluntness as I do not mean for this to be curt, but what created the idea that the person on the other side of the transaction is not a real estate professional? In most cases, the individuals handling the short sale banking transactions are individuals with real estate experience or analysts in the real estate industry. In fact, I'd bet that the individuals handling the transactions are often more educated or hold higher degrees than the majority of agents selling the homes.

A college pal of mine works as a VP in the Real Estate Asset and Appraisal division of Bank of America and, for years, their division has been stocked with some of the brightest and best in real estate, finance, mortgage and lending, economics and land acquisition. These are the same individuals now being recruited to oversee many of the short sale and foreclosure property transactions. I realize that Bank of America (which purchased the assets of Countrywide) has been particularly slow in processing short sales and foreclosures, but neither the bank nor its staff were prepared for the onslaught of more than 500,000 short sale requests monthly. They're getting remarkably better at their job, but finding a process that works has been largely trial and error for all banks.

I know the frustration that buyers feel in waiting for a response on a short sale, and its very easy to blame the bank and their minions for the problems, but its unfair and does nothing to help our clients understand the complexities of a short sale transaction. The best tack is one that emphasizes that we're all (banks, listing agent, selling agent) working as quickly as we can to negotiate a short sale, and requesting updates regularly keeps everyone on the same path.

Hopefully, things will continue to get better at Bank of America, WaMu, Chase, Deutsche, Wells Fargo and others to ensure that we move forward and speed up the short sale process in the very near future.

Sincerely,
Grace Morioka
Area Pro Realty
San Jose, CA

They can pay far less to inexperienced negotiators that do not care about the client!