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Lenders Stall Short Sales, Practitioners Say
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.
realtor.com
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