Secrets That Lenders Won't Tell You About Your Short Sale

Rarely a day goes by that I don't hear a real estate agent ask, "Why would the bank mess up my short sale and let it go to foreclosure?" It's really quite simple...BECAUSE THEY CAN!

I could write a book about everything the lenders won't tell you about the short sale process. However, it would be worthless the moment it is published. The business changes every day, every hour, every minute. The lenders, investors, collections agencies, government agencies and everyone involved in this mess are still trying to figure out what happened, let alone what is happening right now.

ANYONE THAT TELLS YOU THEY KNOW ALL THE SECRETS OF DOING SHORT SALES, CAST A VERY SUSPICIOUS EYE, AND HERE ARE THE REASONS WHY...

1) The lenders still are not sure that what they are doing is right FOR THEM. They are constantly changing their short sale and loss mitigation processes to figure out what will make the best return on the loss. It will change at the whim of those assigned to review the pipeline disaster that is their loss mitigation. And, time and time again, the changes usually are not for the best. They only further complicate the process. The banks are in the business to lend money. The whole loss mitigation and short sale business is still a blur to them. Think about how absurd this business is...I know of one case where they forgave $353,000 on a property without blinking, but killed a loan mod and subsequent short sale for a paltry $5,000.

2) The property is ONLY A DEBIT! The lender will never see or visit the home. The only one that cares about how the home looks is the homeowner. The lenders and their investors DO NOT CARE ABOUT THE FEELINGS OF THE BORROWERS/HOMEOWNERS. They have NO emotional attachment to the property. However, they want to assure that the borrower absolutely HAS an emotional attachment. Remember, those lovely photos in the appraisal are only seen by an underwriter that initially approved the loan. The actual lender does not care for photos and will never see them. THE PROPERTY IS SIMPLY A DEBIT OR A "THING".

3) Lenders and investors make secret deals for billions of dollars every day behind your back! Many agents remain shortsighted on the housing industry, alltogether. They only want to see and believe that their real estate transaction is the only way the lender can move the property. In fact, this is not by any means the principal manner of unloading their inventory. REO's, performing and non-performing notes account for the majority of their swaps. However, those sales are never recorded in public records. Most of them are sold for pennies on the dollar.

4) The housing crisis is NOWHERE NEAR A BOTTOM! The biggest reason for this is the tremendous amount of inventory. And I'm not simply talking about the inventory in the lender's hands. I'm talking about inventory yet to be taken back. There are millions of homeowners living in their homes for free. I have clients going on 2 years without a mortgage payment. The lenders and their investors are simply overwhelmed by this crisis and they would rather see someone in the property taking care of it. Once they foreclose, they are responsible for all the bills on the house. Only 30% of the lender inventory is even available for sale. Nearly three times the current inventory is pending foreclosure. And unless everyone behind on their payments gets back to work and starts paying their mortgage, the crisis will not be going away any time soon.