No Abatement From The Foreclosure Juggernaut?
From those of us in the trenches during this real estate depression, I can tell you that "it ain’t over, yet".
NEW YORK (CNNMoney.com) — Despite concerted government-led and lender-supported efforts to prevent foreclosures, the number of filings hit a record high in the third quarter, according to a report issued Thursday.
"They were the worst three months of all time," said Rick Sharga, spokesman for RealtyTrac, an online marketer of foreclosed homes.
During that time, 937,840 homes received a foreclosure letter — whether a default notice, auction notice or bank repossession, the RealtyTrac report said. That means one in every 136 U.S. homes were in foreclosure, which is a 5% increase from the second quarter and a 23% jump over the third quarter of 2008. Read the rest of the story here.
There’s another part of this story that hasn’t been reported – the part where the banks have been screwing around wasting valuable time when a short sale offer has been presented.
Since the bank bailouts last year, many agents have reported an increase in the length of time it is taking to get a short sale approved… and in many instances, the buyer gets frustrated and walks away.
Here’s the rub – the banks are not prioritizing their short sale offers properly. Quite often, really good offers made by people who intend to live in the property are treated the same as the lowball offers that investors make.
This makes absolutely no sense.
When a properly submitted short sale package comes in, the lender should have a way of screening and prioritizing those offers so that the good offers are addressed quickly – and the lowball investor offers are put on the back burner. After all, the investor doesn’t really care if it takes a few extra months.
Our short sale packages have always contained a complete analysis that shows the short sale to be the logical course for the bank – because we would never take the time to create a package that did not meet that objective. Our packages are usually contain between 100 and 130 pages of documentation, all properly indexed for easy access to any infomation the lender might require.
We have come to the point where I don’t want to take a short sale listing if the seller’s lender is on my &^%$ list… nor do I want to represent a buyer in the purchase of a short sale. The banks have become unreasonable in their expectations of how long this process should take, with many now saying that 4 to 6 months is the current norm.
The sad part is that in nearly every case I have seen where the bank has wasted so much valuable time evaluating a short sale that the buyer walked away – the property is foreclosed and sold for a lower price.
I can stay home and go broke – I don’t have to waste my time with unresponsive banks that shouldn’t have been bailed out.
While I will still evaluate a short sale for a client – my inclination is to stay away. Far away.