Question Details

Dowtin, Other/Just Looking in silverspring

why does it take the bank so long to respond to an offer on a short sale?

Asked by Dowtin, silverspring Tue Oct 16, 2007

can you find out what bank own's the property?

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6
Because when you are working with short sales, you are not yet working with the bank. You are working with a loss mitigator that wants to keep their job.

So if you get an answer, it is something higher than you want to pay so they keep the proeprty in their portfolio as long as they can. They get paid for their time.

Once the bank takes the property back, it is open game.

DOn't mess with loss mitigators unless they are reasonable.

Adopt the operative word.... NEXT!
2 votes Thank Flag Link Tue Oct 16, 2007
Hi Dowtin. There are several reasons why lenders do not respond quickly to short sale offers. First, many lenders are flooded with short sale requests and they have not yet adjusted to the new work load. Second, short sale approvals are done my committees that only meet once or maybe twice a month and they may not get to your offer by the end of the day, which means your offer will not be considered till the next meeting. Third, they are also more motivated by well put together short sale packages. Fourth, if there is a second lender involved, things most likely are delayed even further because the second's motivation is very low as they are offered very little and thus they don't have that much to lose. There's also a possibility that the lender wants to see if any other better offers come in.

Yes, you can find out who the lenders are but it does not do you any good as they will not talk to anybody but the borrower or someone authorized by the borrower if you are lucky. By the way, in a short sale the lender does not own the property, it just feels like it because they have to approve the offer. The reality is that a very small percentage of short sale transactions get closed (probably only 10-15%). Once its bank owned, the response time is typically a lot quicker. I hope this helps.
Web Reference: http://www.theMLShub.com
1 vote Thank Flag Link Tue Oct 16, 2007
Ute Ferdig -…, Real Estate Pro in New Castle, DE
MVP'08
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This could be due to many reasons, the first being that the Loss mitigation deptartment of Banks were not ready for such a vast amount of short sales. The departments are bombarded daily with angry agents, owners and then the investors that are trying to negotiate for the owners. There are only a handful of agents and there are realtors and investors submitting incomplete packages and offers that no bank would even look at.

Although these are great deals, if the listing agent isnt qualified to make the offer to the bank on the sellers behalf then your offer from your real estate agent probably will never see the light of day.

It is hard to tell what the bank has owed, but the listing agent should provide your realtor with details. If not you can search county records for the deeds on the property along with notes.
1 vote Thank Flag Link Tue Oct 16, 2007
Hi Dowtin, the reason it takes so long is because the bank needs to send an appraiser to the property and also they have way to much to deal with. Your agent can provide you with a title report which will detail all loans against the property.
0 votes Thank Flag Link Tue Oct 16, 2007
The shortsale property is still owned by the owner and not the bank. Many of the banks are overwhelmed and have many new employees in the loss mitigation department. Also, there are 1st and 2nd loans and at this time they are not willing the take the hit. Lastly the owner must prove it is a hardship.
0 votes Thank Flag Link Tue Oct 16, 2007
Pam Winterba…, Real Estate Pro in Danville, VA
MVP'08
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You've got to realize the vast majority of these loans have been bundled up and sold off to huge secuity based companies which sold THEM off to investors with the understanding they all where "A" paper or investment grade securities. These "tranches" as they are called now have virtually NO value as the makeup of the loans range from "A" to "D" paper! So even if you are supposedly working with a "lender" regarding a short payoff, the chances are the lender is simply "servicing" this loan and it is buried god knows where in a major portfolio of junk! You must then extricate this "non-performer" from the rest of the "tranche" which in turn triggers all sorts of anxiety from the investor who "owns" the defaulted loan! Plus throw in an industry intent on reducing their overhead due to the lack of loans and you've got a combination rife with "non-performance"!! In other words go buy from a real Seller!!
0 votes Thank Flag Link Tue Oct 16, 2007
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