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Have short sale lien holders been naughty or nice this year?
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Even Santa is surprised by the behavior of banks.

As the end of the year approaches it would do us well to analyze the behavior of the banks. Short sale lien holders have caused many homeowners and real estate agents both grief and joy throughout the year.  We have all heard the stories and unfortunately some of us have been on the receiving end of their “gifts”.

These wonderful packages sometimes come wrapped up in the shape and feel of an approved loan modification, until you unwrap it and find the Notice of Trustee sale stuck on your door with coal dust sprinkled on top.

While Santa is saying Ho Ho Ho, many feel like their lien holder is saying Ha, Ha, Ha.  But let’s not get too cynical, although it kinda of feels good... doesn’t it?  Surprisingly enough, the banks have had some good behavior this year.  After all they did stop foreclosures for a month or two. Okay, but really there has been some good done by the banks this year.

So here’s our list and you check it twice and tell us what you think:

Good…Equator.  Equator is an online system being adopted by banks to upload files to them for review.  While many hated it at first it is an easy system to upload documents and check status.  This really cuts down on the “dog ate my homework” type excuse that banks make when they say that they can not find our five fold faxed paperwork.  Yes that is correct, in today’s age of cloud computing and cyber monday shopping, many banks still use one fax number for the whole company!  Good job Bank of America and GMAC for using Equator.

Bad…Not extending short sale approvals or postponing trustee sale dates.  Come on!  That reeks of the Grinch!  When the loss mitigation department is as slow as molasses in January, they often push us into impossible timelines.  Wake up banks, if you want us to hustle do a little hustling yourselves.

Good… The many negotiators that actually have a heart.  Yes they do exist and when you meet one they are a true blessing.  Banks have also added thousands more, which has made short sale timelines go from 2 years to 2 months in some cases.

Bad.. Forcing contributions from sellers and agents to close short sales.  One of our deals this year was a first deed of trust (no recourse) one loan short sale.  Meaning that if the bank foreclosed they could not come after the seller for a deficiency.  The seller was unemployed and had used his life savings to keep his mortgage afloat.  The lien holder wanted $40,000 to approve the short sale.  Obviously the seller didn’t have it nor did we.  The seller walked and the bank netted thousands less.

Good… The goal of banks to streamline the short sale process. Sorry they lied, but isn’t it the thought that counts?  Not really, that’s just an excuse to give a bad gift.

Bad…poorly trained staff at the bank. Double talk, lost files and incompetence are all things that we deal with each day.  If you have ever attempted a loan modification on your own, you know what I am talking about.  They are not all that way, but the bad ones can kill a deal.

Good…Wachovia Short Sales.  Fourteen day approval!  Wachovia has the system down and should be modeled by other banks.  As soon as they receive the file with all the required documentation, they will approve your short sale in two weeks or less!  Great for those that really just want to get this behind them.

Overall, the banks are getting much better, let’s just hope the good behavior lasts all year.

For free no obligation information about a loan modification, short sale or other options available to you, please call me and my team at 209-627-0791 or go to our website