Recognizing the "Short-Sale" Roadblock
December 3, 2009
Based on the articles that I have been reading in the news papers, the government has realized that the sale of properties that require a lender to discount the amount of the loan payoff has been a process of incredibly long delays. Early on this year as part of the stimulus package, loan servicers were offered a bonus of $1000 for every loan modified or short sale completed. This bonus seemingly was not a sufficient incentive for the loan servicers. It has been recently increased along with guidelines for the servicers to use. What seemed to have been overlooked was the fact that loan servicers make more money on foreclosures than any dollar incentive offered by the government.
If you noted the percentage of "back-up" transactions that I posted yesterday (75%) you begin to believe that their truly is some sort of roadblock to getting the short sale approved or the loan modified.
A question: Is the loan servicer acting in the best interest of the beneficiaries of the loan? As the value of property continued to decline, the beneficiaries lost more money than they might have if the loan had been discounted in a timely manner. Reviewing the data for bank-owned sales, the listing, and therefore the selling price, are seriously below what some of the short sale offers on the property were.
In the interest of the underwater homeowner, the beneficiaries and the persons interested in purchasing a "short sale' property, let's hope that this roadblock can be eliminated.
Based on the articles that I have been reading in the news papers, the government has realized that the sale of properties that require a lender to discount the amount of the loan payoff has been a process of incredibly long delays. Early on this year as part of the stimulus package, loan servicers were offered a bonus of $1000 for every loan modified or short sale completed. This bonus seemingly was not a sufficient incentive for the loan servicers. It has been recently increased along with guidelines for the servicers to use. What seemed to have been overlooked was the fact that loan servicers make more money on foreclosures than any dollar incentive offered by the government.
If you noted the percentage of "back-up" transactions that I posted yesterday (75%) you begin to believe that their truly is some sort of roadblock to getting the short sale approved or the loan modified.
A question: Is the loan servicer acting in the best interest of the beneficiaries of the loan? As the value of property continued to decline, the beneficiaries lost more money than they might have if the loan had been discounted in a timely manner. Reviewing the data for bank-owned sales, the listing, and therefore the selling price, are seriously below what some of the short sale offers on the property were.
In the interest of the underwater homeowner, the beneficiaries and the persons interested in purchasing a "short sale' property, let's hope that this roadblock can be eliminated.
posted by shirley harry at 9:07 AM
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