A huge portion of the current real estate market consists of short sale homes. With almost 25% of American borrowers underwater, the number of short sales is at a record high. This creates a huge problem for people trying to buy homes, as well as banks needing to approve short sale transactions.
Recently, Bank of America spoke to a group of real estate professionals in Washington DC about what needs to be done to keep down the time it takes for short sale approval. Bank of America has recently hired thousands of new employees to work with their numerous short sale files. Even with the additional help, its not enough.
If people would qualify themselves first, before listing their homes as short sales, the number of short sale homes would be greatly reduced. Essentially, there are two different approvals that much take place for each short sale transaction. Short sellers need to demonstrate that they are insolvent and have no means to actually pay their debt. They need to demonstrate that they have no real options other than short sale, and that they have experienced a legitimate hardship that caused the situation. They need to be in “imminent danger” of foreclosing. After its substantiated that the seller qualifies for a short sale, then the property can be considered for short sale approval. A large portion of the homes listed as short sales have sellers that don’t actually qualify. Sifting through thousands of files where sellers don’t actually qualify for short sales is a huge wast of time for banks.
Home owners need to realize that short sales don’t eliminate their debt obligations. Short sales are not a good decision for people who can make their payments and have means to sell their home without a short sale. Avoiding a short sale might actually save howeowners money in the long run. A lot of the time, banks can legally pursue the short seller more than five years after the short sale transaction. Short sales don’t provide a magical pass that eliminates sellers unfortunate circumstances.
If we can lower the amount of Arvada Colorado Homes for Sale, Goochland VA Homes for Sale, and Arlington WA Real Estate listings, that are listed as short sale properties. Then short sale files will take a lot less time.