Are banks dragging their feet on short sales?

The California Association of Realtors® (C.A.R.) published its findings of a survey this week, which show that tedious lender requirements and poor communication hamper short sales.

MAKING SENSE OF THE STORY

• Fewer than three of five short sales close in California, illustrating the complexity and difficulty of navigating lenders’ and servicers’ short sale procedures, according to C.A.R.’s survey, which gauged REALTORS®’ experience in working with short sale transactions – transactions in which the lender or lenders agree to accept less than the mortgage amount owed by the current homeowner.

• Although not every homeowner or mortgage is eligible for a short sale, those who are able to finalize a short sale avoid a foreclosure on their credit record and can move on with their lives.

• Banks are taking much longer to respond to short sale offers than those specified in government guidelines for banks. Nearly two-thirds of survey respondents said banks took longer than 60 days to respond to short sale offers. Often, this results in buyers walking away from the transaction.

• “Increasing the number of successful short sale transactions is one important way we can help California families avoid foreclosure and move our economy closer to recovery,” said C.A.R. President Beth L. Peerce.

• C.A.R. is asking government agencies, such as the U.S. Dept. of the Treasury, to force banks to complete all short sales following HAFA guidelines and to comply with the program’s time frames.

Read the full story from the LA Times here: “Banks drag feet on short sales, survey finds.”

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