2 p.m., Dec. 10
Realtors' Short Sale Woes Continue
The California Association of Realtors, apparently backing away from previous statements pushing a generally positive outlook on the state’s housing market, says in a news release that “short sales will be a part of the California real estate landscape for years to come.”
Realtors say the benefits of a short sale are many. Distressed sellers, who have often lost jobs or been forced to take employment at lower pay than when they purchased homes, are able to walk away from debt without facing bankruptcy or foreclosure, thus causing less damage to their credit ratings. They also get to control when and how they move, instead of facing eviction after a foreclosure.
Banks get the benefit of selling a house that’s still occupied and cared for by the owners. These houses typically net a higher price than those that have been abandoned and neglected, and any extra money goes to the bank, lessening their losses. They also save several thousand dollars in not having to pay a trustee to complete the foreclosure process.
Neighbors of a short sale, while often upset about any distressed listing, are better off due to the higher prices short sales fetch doing less damage to their own values. They also don’t have to endure abandoned eyesores that are often poorly maintained by foreclosing banks.
Real estate agents, of course, only collect a commission if a sale closes, and thus have the ultimate motivation to see more short sales approved.
The Association on Wednesday sent letters to JP Morgan Chase, Bank of America, Wells Fargo, and Citigroup, urging the large banks to implement better procedures for the handling of short sales. Among their requests: • Provide and meet realistic time frames for offer evaluation • Provide borrowers with a complete list of documentation needed to process a short sale • Stop cancelling short sale requests and making borrowers re-start the process from square one if only one or two documents in a package are missing or incomplete • Increase processing speed (many buyers of short sales become tired of waiting for bank responses that take weeks or months) • Increase the amount of money available to pay off secondary mortgages (these lenders often block a sale if primary lenders won’t offer a suitable payoff)
“We believe banks, investors, homeowners, and real estate professionals all have a common interest in conducting these transactions expeditiously and efficiently. The housing market recovery is in everyone’s best interests, and your urgent focus on these issues will help achieve that end,” wrote Association President Beth L. Peerce. ““We are convinced that by correcting these items, your system will run more smoothly and, in the end, save everyone money and resources, as well as assist in the housing market recovery.”
More like this:
- Rising prices drive distress sales from housing market — April 23, 2013
- Two-thirds of "short sellers" experience difficulties — Oct. 24, 2012
- S.D. Realtor Says Bank Failed to Follow Federal Assistance Program Guidelines — March 19, 2012
- Realtors Frustrated with Short Sale Lenders — July 29, 2011
- Upside-Down? Go Short — Oct. 8, 2008