Lake Oswego Short Sales: Whats In A Name

2 June 2011 0 Comments

For many distressed Lake Oswego real estate owners who are looking to sell, a short sale could be their only path to avoiding foreclosure. With all of the steps paperwork and waiting involved a short sale can feel like a very difficult path to take. Talk to a Lake Oswego Realtor who has some experience with the entire short sale process to see if the process is right for your situation. Below are a couple of reasons why the short sale process can take a bit of time compared to other types of sales.

Five reasons why Short Sales are not like their name.

1) Bank or Servicer
The “Banks” are quite often the main reason for any delay in the short sale process. Processing a West Linn short sale can easily be accomplished, but some banks simply fumble the case or goof up the files. Banks often say that they never received the files or documents, or if they do receive them they turn around and lose the documents or files. The staff is quickly put together or inadequately trained to deal with the load of work that it takes to complete a short sale. Many times the person the file was assigned to leaves, quits, gets fired, and they have to re-assign the files. Or someone just doesn’t move forward with the case or, they never assign files to start with. Reassigning for whatever reason almost always means, starting over. In addition, some banks are now using third party servicing companies to process their files which adds another layer of bureaucracy.

2) Investor / Mortgage Insurer
The investor and/or mortgage insurance company can often times be the reason for the delay. After the short sale application are compiled, sent in, lost, found again, resubmitted, the 3rd different negotiator assigned to the case, reviewed by the bank and initial negotiations have taken place, then files can be submitted to the investor and/or mortgage insurer for their final review. Some of these entities take 45+ days to review. After all of that , they still need to issue an approval to complete the short sale.

3) Broker Price Opinion (BPO) or Appraiser
To make sure that they are recovering an acceptable amount for the asset, the bank will order a valuation of the property . While some banks are using appraisals, others still rely exclusively on a Broker Price Opinion or multiple BPOs. If the valuation is not accurate, it could take additional time to convince the bank otherwise. That additional time could amount to a significant delay in processing the short sale.

4) Buyer
One very common occurrence is that the buyer backs out because they got tired of waiting for the approval to move forward on the transaction. Short sale approvals are often issued to one particular buyer. It is not unusual for the bank to do some investigation as to whether the buyer is an arm’s length buyer, i.e., not your cousin or your business partner. Most times if the buyer backs out, the entire process has to start over again.

5) Seller
A distressed sellers in a short sale situation can be their own worst enemy. Many times a short sale seller is so overwrought about their financial situation that compiling the necessary paperwork becomes a very daunting task for them. This can add to delays in the process. Sellers are often slow to provide the necessary documents for the short sale. Some documents have to be requested from third parties and take time to receive. Some documents must be compiled by the seller, current profit and loss statements (if the seller is self-employed), financial statements, and one of the most important, the hardship letter.

I have had short sales move rather quickly and close in just under 30 days. I know of some that have closed in less. I have heard of a negotiator being assigned before an offer is in place. I have even heard of most of the negotiation being done before the home hits the market (very rare case). All of those cases are exceptions, not the rule.

Its like calling a really big person Tiny or a someone with no hair Curly,a Short Sale is nothing like the name states.

Distressed

Short Sale Rejection

SHORT SALE NAME