What most homeowners really want is to lower their loan amounts, which is not something that will happen in the way they desire.
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Seeking expert advice that goes far beyond what a realtor can legally provide is essential to being able to chart a good course for an individual's needs. Many people mistakenly make the assumption the getting legal advice will be cost prohibitive and out of there reach. Good legal services can cost money but it has been our experience that it is not excessive and is usually worth the effort.
I'd like to rephrase your question to make a point. "If more lenders took their responsibility seriously, there would be less need for the "short sale" process.
There are some other options & programs available to homeowners besides short sales such as forbearance, loan modifications, UP, PRA, 2MP, HARP, FHA Short refinance to name some. A Short sale is not the easiest transaction but it is also an alternative to avoid foreclosure. Short Sales are less damaging to your credit, and easier to recover from, than Foreclosures and a better option. I think homeowners, and agents/brokers too, would be better off if they familiarize themselves with these options so that they can make a more informed decision and determined if a short sale is the best solution for the homeowner.
In the cases that Kathleen points out ... if the alternative is foreclosure and they know it, then a short sale would be a better option than foreclosure.
If the cases are more like those Ellen and Sarah seem to encounter, a short sale will probably not give them the result they are seeking ... which is to unload a house that is no longer worth what they'd paid for it. In those cases, it would probably be worth it for them to approach their lenders to discuss a refinance. If they are over 65, they may qualify for a variety of government programs ... but there may still be ways to benefit from the lower interest rates, without unloading the house.
When a citizen is placed in a situation where they must select a "Least Worst" option in an arena as unpredictable and complex as a short sale, decision paralysis is not uncommon. Our expectation of the citizen to understand such transactions in which we are immersed in everyday, may be just too great a reach.
In my opinion, discussing a short sale is an exercise in futility. However, discussing the outcome most beneficial to the homeowner, (5,6,7) and the instruments available to achieve their stated goal, is the most productive approach.
As stated before, most want to stay in their home. The deception of mortgage modifications is incredibly demoralizing and places a homeowner is a 'skeptical' frame of mind. Principle reduction is the solution, but is the exception. Short sales occur because this is the process the banks have in place. A destructive, punitive, costly option. Sigh...it's the tool the banks make available and we all must utilize.
More people would be willing to engage in a short sale if the outcome was more predictable. Solve that and you will have a winning plan. There most certainly ARE ways to accomplish this. Remove the uncertainty and you will have a willing seller who is ready and prepared to move on with their lives.
Ellen G. Friedman, Keller Williams Realty, http://www.ellenfriedmanhomes.com