From Realtor Magazine Online, Daily Real Estate News April 24, 2008
Real estate practitioners across the country believe mortgage lenders are worsening the housing downturn by taking months to make decisions on short sales and sticking to high internal target prices.
As a result, home buyers are abandoning short sale properties, forcing them to be sold in foreclosure sales that typically result in lenders accepting lower prices than they could have achieved in a short sale.
"The only question banks should ask is can they make more in a short sale than in foreclosure," according to Lighthouse Point, Fla.-based real estate practitioner Ron Rosen, who cites a "broken" system.
"The answer is that in nine out of 10 cases they will lose more money in a foreclosure. But banks seem to be asking a different question."
Some practitioners contend that lenders lack the appropriate systems and staff to handle short sale requests, while lenders insist the short sale process is complicated by the need for approvals from investors and mortgage insurers.
Still, practitioners note that a more efficient short sale process would boost prices and reduce inventory.
Source: Reuters, Nick Carey (04/22/08)
[TJ: This has certainly been our experience in greater San Diego. Countrywide, perhaps the worst offender and the greatest contributor to the Subprime Debacle of 2007 has been very slow to respond.]
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