Short Sales May Be Easier To Manage in The Near Future!!

Yeah, I'm so excited, I sure hope this really can happen!

I just read an article that ran May 22^nd regarding how some of the big banks such as Bank of America and Wells Fargo, are working on making it easier to work with short sale situations. The Obama administration last week unveiled a strategy to promote short sales as well.

With the number of short sale listings growing at an unprecedented rate, hearing that some of the big banks and the president have plans in the works to streamline the process is music to my ears. I'm sure many a short sale home seller as well as buyers trying to purchase these homes and their Realtors assisting them thru the process will be thrilled as well.

Short Sales should be more advantageous to both the lenders and the homeowners if they can actually happen. For the lender, one would think it less costly than having to repossess, market and maintain a vacant property. Often in the past I have wondered why the lenders had not already figured out ways to streamline the process as it seemed so counter productive. Because of the complexity of these transactions -- including the need for approval of a sales price by lenders, investors and mortgage insurers -- the sales often fall apart. Many times by the time the sellers get an answer from the bank on an offer, their potential buyer has lost interest and gone elsewhere buying a home that is easier to buy.

From what I read, Bank of America, the nation's largest mortgage servicer, states that more than 60 percent of approved short sales do not close, which is why the bank wants to streamline the process.

In the past, the bank did not begin the lengthy process of qualifying a borrower for a short sale until it had received a purchase offer. To expedite these short sales, Bank of America has enlarged and updated staff training and set up a phone line dedicated to short sales that borrowers and their agents can use. In the near future there will be a Web portal that will accept qualifying documentation from clients wishing to do short sales.

Currently it typically takes 45 to 60 days for the bank to tell a client if a short sale offer can be accepted, and up to 90 days if an investor must approve it. Bank of America's goal is to shorten the wait to a week. When that time comes we all will be singing praises to B of A.

Short sales will also benefit from President Obama's an amendment to the Making Home's Affordable program. Last week it was announced that standardize short sale application and acceptance forms will be implemented. It also provides monetary incentives to servicers and may help cover relocation expense for homeowners.

Wells Fargo Home Mortgage, has indicated that their bank has been working many months to reduce delays in the short sale process. The bank is working closely with borrowers' agents to increase the likelihood that the listing prices on a short sale will be accepted.

The lending and real estate industries have certainly been on a crash course in short sales since the housing market bust. The biggest challenge has been not understanding the process, Now that many of us have had some experience with the process and with some of the banks attempting to streamline it I think we might just see that lite at the end of the tunnel in the near future. Let's all hope that that is the case. There are some excellent opportunities for buyers if we can just figure out how to get these transactions to close more quickly.

I for one am very much looking forward to what transpires down the road.

Lynn Bowen

Domaine Real Estate - Sebastopol CA

Lynn@DomaineRE.com 707-695-3814

www.LynnBowenRealEstate.com