Short sales in Florida (and other areas) have been mostly a pain to deal with for buyers, sellers and Realtors. The lenders involved have made these less attractive for many buyers due to their taking 3-6 months or more to give an answer on an offer submitted, difficulty in reaching someone to get answers on progress and an overall lack of adequate service.
However, starting this week, Bank of America has started a new procedure for short sales that they say will reduce the time it takes to get a reply on an offer to 20 days and from the article below it looks like other banks may start to see that they should move in this direction too.
Now that there are more short sales than foreclosures and there is an advantage to lenders to have a property sell as a short sale rather than taking it back as a foreclosure, we might start to see the short sale process become less painful for all involved.
Florida Short Sales
By John Gittelsohn - Apr 17, 2012 6:00 AM ET from Bloomberg.net
In Florida, the number of short sales has exceeded foreclosures since July, according to Lender Processing Services. That’s about nine months after banks imposed a moratorium on home seizures amid allegations they used improper documentation and forged paperwork to claim title to properties with delinquent mortgages. The five largest loan servicers, including Wells Fargo, Bank of America and JPMorgan, agreed in February to a $25 billion settlement of the allegations….More at Housing Misc: Short Sales surpass Foreclosures, Asking prices up, Inventory down year-over-year
In addition to trying to speed up the process, banks are now even offering to assist homeowners financially who agree to do a short sale.
Banks have sped up the short-sale approval process, requiring less paperwork to prove hardship, especially for homeowners who haven’t made a mortgage payment for months on their primary residence, said Ethan Gregory, a broker with First Coast Realty Associates in Jacksonville, Florida. Banks have offered his clients as much as $13,000 to relocate, an incentive that gets the homeowners engaged in selling the home, he said.
Banks “embraced it before the settlement, but the settlement pushed them to do more streamlining,” said Gregory, whose firm handles about 50 short sales a year. “They understand it’s really the best exit for them.”…More at Housing Misc: Short Sales surpass Foreclosures, Asking prices up, Inventory down year-over-year
I won’t bother commenting here on whether I agree or disagree with this practice but I do feel that if the banks make changes that result in short sales being more tolerable that it would be a good thing. I’m hopeful but will be watching what actually happens with short sales over the next few months to see whether or not the process improves.