As a Realtor, I’m very happy to see California Association Of Realtors taking a stand on the much needed topic of processing Short Sales and dealing with unresponsive lenders. There are so many reasons that we all must stand up and hold these lenders accountable.
A short sale has been deemed the best way to deal with an underwater homeowner who has to sell. Lenders have spoken out to homeowners and pleaded with them to not “walk away” from the home, work with us…it’s better for the community, it’s better for “our bottom line” It’s just better…to do a Short Sale than a Foreclosure.
Problem is no one is holding these lenders accountable for anything, no nothing. They take money from the Government, still, no accountability. If we as Americans are going to see housing recover…which will lead to our economic recovery…we have to all take a stand against these bully lenders.
Yes, it’s true, no one can make them accept a short sale…but come on…Stop dangling the carrot in front of homeowners if your not going to honor your words!!! It’s an emotional situation to be in, moving your family is hard enough…most likely the situation is worsened by lack of income due to unemployment.
Now enter the Lender who tells these homeowners “We want to help”…hmmm, funny way of showing it, when you take months and months to decide if your going to accept a fair market value price on a home that is most certainly going to foreclosure if you don’t.
Meanwhile, prices are declining, the homeowner can’t move on….why? I talk to negotiators everyday, I can tell you why…NO Accountability and NO Structured Policy to follow. They make up their own rules, each individual that works for these lenders seem to have “an interpretation” of how they process the short sale.
Check out the article that just came out to Realtors today….also look for a full page advertisement in the Los Angeles Times as well as 6 other Major California newspapers reaching out to lenders tomorrow to stop the shenanigans and help homeowners to avoid foreclosure.
Happy Reading!
For release:
March 8, 2011
LOS ANGELES (March 8) – 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 a Short Sale Lender Satisfaction Survey conducted by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). The survey gauges 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.
“It’s disappointing that less than three in five short sales close, despite every effort by the REALTOR®, home seller and potential home buyer,” said C.A.R. President Beth L. Peerce. “Many underwater homeowners who have been hit by the recent economic crisis can no longer afford to stay in their home and just need to sell their home as expeditiously as possible are unable to largely because of the complex and cumbersome short sale process,” she said.
Of the REALTORS® surveyed, 94 percent participated in a short sale transaction during 2010, demonstrating the surplus of short sale listings in today’s real estate environment.
The most frequent problems REALTORS® cited in working with lenders and servicers during the short sale process include unresponsiveness, onerous procedures, and long processing delays.
Nearly three-fourths (70 percent) of REALTORS® said that closing their most recent short sale transaction with a lender or servicer was “difficult” or “extremely difficult,” while only 10 percent said it was “easy” or “extremely easy.”
“The lack of standardization, long approval process, and lack of lender approvals are hampering what should be a 45-day short sale process,” said Peerce. “Instead we’re hearing the typical response time for lenders is at least 60 days, and in many instances, their response time exceeds 6 months.”
More than half (63 percent) of REALTORS® said that lenders took more than 60 days to return a written response of the approval or disapproval of the short sale agreement submitted. Only 4 percent said they received a written response in less than 14 days.
Additionally, 44 percent of REALTORS® said that lenders took more than five business days to return any form of communication to REALTORS®. Only 14 percent said lenders responded “within one business day.”
“The survey results show that the short sale system is clearly flawed and must be standardized and streamlined to reduce the inventory of foreclosures,” said Peerce. “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,” she added.
Further illustrating faulty communication problems, 64 percent of REALTORS® were “not satisfied” or “not at all satisfied” with the timeliness of lenders’ response to their inquiries, while only 22 percent said they were “satisfied” or “extremely satisfied.”
Moreover, nearly three-fourths (74 percent) of REALTORS® were “not satisfied” or “not at all satisfied” with the amount of time it took to hear whether a transaction was approved or disapproved, while 16 percent said they were “satisfied” or “extremely satisfied.”
In overall satisfaction with the lender they worked with, 67 percent of REALTORS® were “not satisfied” or “not at all satisfied,” while 19 percent were “satisfied” or “extremely satisfied.”
C.A.R.’s Short Sale Lender Satisfaction Survey was conducted during the last two weeks of December 2010 to gauge REALTORS®’ experience in working with lenders or servicers of short sales, bank-owned properties (REOs), and foreclosures. The survey was delivered to 20,000 REALTORS®, with 2,150 responding to the survey.
Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 160,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
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