Foreclosure in Los Angeles>Question Details

Charles Lidz…, Home Buyer in Los Angeles, CA

Why so long for short sales? Why not just several more days, instead of several more weeks or months?

Asked by Charles Lidzbarski, Los Angeles, CA Sat Feb 28, 2009

This addresses the APPROVAL of a short sale, not its closing.

Do these short-sale lenders have a "senior person/manager" to review and in-essence negotiate the terms? If so, how long "should" it take a "senior person/manager" to review and approve or not approve or counter an offer on a short sale? By the time an offer is received, wouldn't the short-sale lender ALREADY have all the information "needed" on: the status of the borrower, status of the loan, local market condition/comparables, etc., etc., etc??? If so, how long does it take to review that and make a decision???

Days maybe, because of the volume, but certainly not weeks or months?

A real estate agent has told me the short-sale lenders "don't care". If so, isn't it in the BEST INTEREST OF THE SHORT-SALE LENDER to eliminate a non-productive asset/loan(as we keep hearing about the banking turmoil) and as soon as possible, and avoid the high cost of foreclosure to the short-sale lender we keep hearing about?

Help the community by answering this question:

Answers

5
Short sales are prohibited or not economically realistic for the sub prime lender who really is not a lender. There is no promissory note for starters. Watch every news channel in the land for more info (you heard first here).

A bankrupt insulated company or shell in a Pass through Trust cannot hold assets. The servicing agent is representing the Master servicer who represents the trustee who is representing the pass through investors (DOES 1 through 99) got it!
The lender and servicer have only a peripheral interest in the note and lien and that interest is a buyback provision - you see. They get a huge incentive for a foreclosure after 36 months or other term solely from recourse. Then they will move fast to a controlled sale to recoup proceeds from insurance (OC and E&O) and other secondary claims. Rule / code 2923.5 requires the lender to conduct ethical due diligence for 30 days and they will appear interested till that term runs out. Then forget it...it’s a deceptive and unethical process to be proven in court.

Last time (sub prime ) lenders are not a lender.
0 votes Thank Flag Link Sat Mar 7, 2009
Charles,

The other agents are correct on their information. Any agent that tells you that lenders don't care- I have not found that to be the case. What I find is that they are swamped.

It can take the bank 2 weeks to get back to an agent or many months. This can depend on many different reasons. Good news: I am personally finding that the banks are getting back to me quicker. I hope others are finding over all the same.

Some times the bank has all the information a head of time and all they are waiting for is an offer. But, in most cases they don't have everything UNTIL an offer comes in.

The bank then has to do BPOs (typically 2- can be more)- done after the offer is submitted. I had asked a bank about doing it head of time- most banks will not. By the time one is done and an offer comes in can be a big difference in what the place is worth. So they wait until an offer.

Several Reasons for the offer to take time:

The BPO/ Appraisal time- can take a few days just to get someone out there. And if they do more than 1 that adds up on the days

Not all the required paperwork is in. ALL of the paper work should be completed and in at one time- at the time of the offer. A Loss Mitigation specialist at the bank will not entertain an offer that is not complete.

The loss is large. If the loss that the bank has to take is small the faster the offer MAY be accepted. If the loss is large they will take the time to justify that loss.

The Loss Mitigation/ Short Sale (each banks calls it something different) division is swamped

The loan can be investor backed- like Fannie Mae or Freddie Mac and with them the larger the loss the longer they take.

If there are 2 loans with different lenders can take longer- especially if they can't come to an agreement on how much the 2nd holder will get.

Could be more but these are most of the reasons.

I hope this helps you .

An experienced agent on the listing side and buyer side plays a big role in how successful the process is. It is not something that is quick. It can be very successful for both sides. It is not something to be afraid of. It is not for everyone (depends on someone's time frame) but, it can be very worth the wait.

BTW if the listing is bank approved short sale at the price- it usually will say bank approved price.... that takes less time than a regular short sale. That usually means that the agent has had a previous offer and it is back on the market ready to sell.
0 votes Thank Flag Link Sat Feb 28, 2009
Hi Charles, We all feel your pain! We deal with this everyday! It is very hard not to be impatient but it will not serve our clients. The other problem is 60 to 70% of the properties on the market are short sales.
0 votes Thank Flag Link Sat Feb 28, 2009
Yes, Monique is correct - it is mainly a manpower problem. You are correct also, in that it IS in the best interest of the lender to eliminate the asset via short sale and cut their losses, rather than be saddled witht he property and the foreclosure process, which is more time consuming and expensive. I believe the main problem with the extensive time delay on short sale approval is the incredible volume of short sale requests coming in to lenders, when they only have the man power to process a fraction of them. It is my understanding that some short sale processors could be receiving on average of 20-25 short sale requests per week, when they are only able to process less than 5 per week. You can imagine what that stack of requests looks like after a while!! Best advice is to be VERY nice to the processor and hope your request gets bumped toward the top... Good luck!
0 votes Thank Flag Link Sat Feb 28, 2009
Hello Charles,

Most of the banks just don't have the man power to get these completed quickly. It is a process getting these done. You can't start negotiating a short sale (getting the bank what they need) until you have an offer. I haven't heard of anyone getting a senior person/manager to negotiate these. You get who you get. The bank needs to get your offer, do a BPO, speak with investors to agree to the short sale. The documents I completed on my last short sale were over 100 pages and it is slowly requested and completed as you go.

Best,

Monique Carrabba
The Carrabba Group
Keller Williams Hollywood Hills
mcarrabba@kw.com
323.899.2900
0 votes Thank Flag Link Sat Feb 28, 2009
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer