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Matt’s Take on the News
October 25, 2011
The Long Sale
I liked the headline so much I had to borrow it from the author of the article, Greta Guest from the Detroit Free Press. While the article points out the obvious that short sales can and do take a tremendous amount of time to complete, the article also points out the role the private mortgage insurance plays in further delaying short sale approvals. Be aware if PMI is included on loans that you are currently involved with. Ms. Guest also points out the need to involve an attorney in this process…why wouldn’t you?
Also, a reputable investor that is involved in a short sale transaction can also minimize the time to close. Call me and ask me how.
The following quote from the article is a bit misleading (no fault of the person quoted), “Klorinda Hibbert, a real estate agent at Michigan brokerage Re/Max in the Hills, spends most of her day working on short sales and has 14 in progress now. She’s noticed changes in the past year — and they aren’t for the better.
She said lenders and servicers are requesting more than one broker’s price opinion. The lender works with real estate brokers who put together a valuation on the property based on what similar properties are selling for. They’re also requesting formal appraisals. They are good for only 90 days.
“The banks are willing to go into foreclosure rather than do a short sale,” Hibbert said. “They want to get paid in full.”
The reason I say it is misleading is due to the use of the word banks. The reality is that 90% (give or take) of mortgage notes are being serviced by the “banks”. What that means is that the longer they can draw out the short sale process, the more they get paid. If the servicers drive the property into foreclosure, guess what? They get paid.