steveluci2, Home Buyer in Henderson, NV

are banks holding back short sales?

Asked by steveluci2, Henderson, NV Tue Jun 12, 2012

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The Office of the Comptroller of the Currency (OCC), which provides regulation and best practice guidelines for banks, has published additional mandates to address issues already articulated in previous regulations that go back nearly 4 years. The additional mandates have the effect of freezing banks, again, in their tracks as they do their best to maneuver to avoid violating the ever changing sands of post-bust financial disclosure.

What does this mean...a further backlog of NODs and the follow on short sales and foreclosures. There is a tremendous amount of inventory, with BofA and Wells Fargo not even in the game yet.

This will have an immediate effect on home prices. Caveat Emptor!
0 votes Thank Flag Link Tue May 28, 2013
Some or the delay has to do with attorney's who have found legal loopholes that make it virtually impossible for a financial institution to foreclose. I've seen two families in Northern Nevada that have not paid their mortgage in 2 years.
0 votes Thank Flag Link Tue May 28, 2013
AB284 had an immediate and profound effect on both foreclosures and short sales. Looking at the data, when AB284 became law in October 2011, NODs (Notices of Default) stopped. This allowed homeowners that stopped making payments (something many were told to do by the very same banks in order to be taken seriously regarding modification) to stay in their homes, free, for what turned out to be well over a year, if not more. The public and private sector are working on modifying the legislation to start clearing the backlog of NODs as well as foreclosures, the often talked about 'Shadow Inventory'. This should also hasten turnarounds on short sales, which are still taking too long in most cases.

This should free up inventory, but we are still not certain as to how many will be short sales and how many will go back to the bank as foreclosures. In addition, no one knows for sure if it will be a trickle or will the flood gates open.
0 votes Thank Flag Link Mon Apr 8, 2013
I am still seeing short sales take a long time. Even with good listing agents working the short sales and even when they "pre-approved". There is no way to really know if it is intentional delays by the banks or not.
0 votes Thank Flag Link Wed Jun 13, 2012
I agree with the REO being held back. I see numerous listings, "Coming Soon" with a real estate sign. No-one has an answer of why it sits there 3, 6 or 9 months vacant. Soon to be vandalized. Sometimes you see some work being done. Other times the grass and trees are screaming at you as you drive by, Water.......! Water!!!!!...... The short sales do seem to have owner issues. The paperwork that is needed to do a short sale are all the financials of the seller, every single month. The banks might not give you an answer the first month, then the financials become outdated and the banks ask for new financials again. Hope that answers your question.

Sincerely,
Bonnie Star
Dreams Realty
Reno, NV
0 votes Thank Flag Link Tue Jun 12, 2012
I doubt it, having worked with the largest of them I can testify that most of what goes on is checking off items on the list, very little independent thought by the worker bees.

My personal observations on several that I have worked on is that the seller is the choke point. Example, if the lender asks for the most recent pay stub and the deductions show an automatic deposit to a savings account but the seller has told the lender they do not have a savings account, BOOM, short sale implosion.

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
0 votes Thank Flag Link Tue Jun 12, 2012
Banks are holding back the foreclosures due to AB284. This law makes it difficult for banks to foreclose which in turn, makes short sales even more attractive. The problem is the home owners need to realize how the short sale process works and be proactive in getting out from under the mounting debt.
0 votes Thank Flag Link Tue Jun 12, 2012
It could be anybody's guess if they are. I can see how It is easy to get the impression because of the time it takes to complete one. But first remember a seller will initiate or put a property on the market to short sale, the bank obviously has to approve it and could delay it but I think the time it takes them to complete the process is just overwhelming due to the sheer numbers of short sales. I would guess and it is only a guess that the banks would be more in a position to hold back REO properties more than short sales.
0 votes Thank Flag Link Tue Jun 12, 2012
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