Short Sale...Is the joke on us?

Anyone that actually works on short sales will understand my frustration and I’m sure has experienced it themselves. So really this post explores the true purpose of a short sale. Please tell me what you think?

I’ve been advocating short sales and discussing all possible options with my client and a common question seems to be why short sale over foreclosure? Frequently it’s better for my client to do a short sale but why would a bank want to do a short sale? Do they marvel in the idea that they are “helping America” by processing these requests but secretly laughing as realtors bang their heads against the wall in hopes of finding relief for our clients? Do they toast each other as they go through the motions of reviewing a loan modification only to know that most fail in the long run because it’s a temporary fix?

So I ask…what is the motivation for a bank to do a short sale? It saves them time and we all know time is money. But I wonder does it really save them time? Hiring people to process loads of contracts and then to analyze if it makes better financial sense to accept this offer over another. Really if they can foreclose, go after the seller for the deficiency and get reimbursed for their loss (I love paying taxes for this one)…who makes out?

And let’s not forget about the fabulous OPTIONAL government program to help sellers with a short sale…HAFA. Maybe the bank participates…but maybe the investor backing the loan does not. Ahhh… what! So the bank (yes I know…it’s the investor silly) can pick and choose which loans participate and which do not?

How about this circle of fun! The First will not review the file until the Second releases their lien. The second won’t release their lien until an offer is received. So what should we do? Market the heck out of the property to get an offer or illegally manufacture an offer just to get the ball rolling (please don’t take that one literally. I’m not advocating illegal activities). Which of course then bogs down the entire system with a load of fake offers? Finally, the First refuses to postpone the auction date because of guidelines that allows them to be reimbursed for their loss if they foreclosure within a specific time frame.

Are banks publicly advocating helping homeowners with all these useless programs and silently laughing as they count their money? Why are our government officials so clueless? In ten years will we look back and say “What a textbook example of a public relations success story!”