Short Sales May Soon Get Easier
Posted by Rachel LaMar, J.D. | Visited 1317 times, 2 so far today | Leave A Comment »
If you have sold your home through a short sale or are contemplating doing so, or if you are an agent with experience selling short sales, you know how difficult they can be. The main problem is getting the lender to accept the offer.
Often this is a lengthy process and many buyers give up at some point and move on to make an offer on another property. The difficulty for agents is confounded by the fact that every lender seems to have its own set of rules and procedures.
This may all change soon.
The Obama administration understands the frustrations of sellers, buyers and agents and has been attempting to establish short sale protocol to speed up the process for everyone by offering financial incentives to lenders, but this too takes time and is undoubtedly met by resistance from lenders. 
A few lenders have taken it upon themselves to stand out and carve the way for others to ease the process. Bank of America, one of the largest financial institutions, recently announced that it is going to revamp its short sale process.
A typical short sale process can take anywhere from one to three months (some even longer) from the time the offer(s) is submitted. Bank of America plans to streamline this process by shrinking total time to one week or less. “Wow,” you say, right? I agree. It remains to be seen, BUT this is very important news.
Often when a large lender institutes a policy that helps make the process smoother, other lenders follow in their footsteps. We saw this happen last year when Citigroup was the first to announce new procedures to help with modifications–others followed suit.
The impact of this announcement could be astronomical, since after it’s recent acquisition of Countrywide, Bank of America services one in five mortgages in the U.S.
Since short sales have doubled this year this could be a significant improvement in getting inventory off the market much more quickly. Bank of America surmises that this program will be in effect in the next 60-90 days.
It plans to reach out to the homeowners right at the beginning of the short sale process, when the homeowner decides to utilize the short sale method, instead of the typical response which comes once an offer has been submitted to the homeowner. This will be a win-win situation for homeowners, buyers and the banks, and will get inventory sold and off the market quicker, thus avoiding more foreclosures and empty properties.
Short sales are typically a preferable option to foreclosure, as they allow the homeowner to sell their home for less than the amount owed on the loan and walk away from the debt. The lender has to approve the short sale and typically the homeowner’s credit is not as severely affected as with a foreclosure, allowing them to repurchase in about 2 years (compared with 5-7 years for those who have gone through foreclosure).
To learn more about the short sale option and other options to foreclosure, you can visit www.MortgageWalkawayOptions.com.
