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“Despite promises by lenders to improve their short-sale processes, clearly, they are not doing enough,” said CAR President Beth L. Peerce.
Kim DiBenedetto, a real estate agent with Coldwell Banker Del Monte Realty in Carmel, says the problem stems from lenders kowtowing to bottom-line-thinking investors, who may see a foreclosure as a better deal.
“I think the lenders are trying, but they have so many different investors and limited authority,” DiBenedetto said.
“We have to stop thinking of Wells Fargo, Bank of America, CitiCorp, etc. as the ‘lender.’ They are the servicer for as many as 2,500 investor groups. How much authority the servicer has to negotiate with the home owner depends upon which investor group owns a particular loan, which is why short sales are so hard to get processed,” she added.
CAR said real estate agents’ most frequent obstacles in the short-sale process were communication issues during the slow response time to package a short sale (cited by 66 percent of agents); poor communication with lender representatives (55 percent); and repeated requests for documentation (51 percent).
More than 15 percent of the agents polled in June this year said the lender foreclosed on the home before the short-sale transaction could be completed.
Two-thirds (67 percent) of agents said it took more than 60 days for lenders or servicers to return a written response on the approval or disapproval of the short-sale agreement submitted; 43 percent of agents said it took the lender more than five days to return any form of communication and fewer than 20 percent of agents said lenders responded “within one business day” or less to agents’ communication attempts.
Real estate agents’ overall satisfaction with lenders in their most recent short-sale transaction remained extremely poor, with 75 percent saying they were “not satisfied” or “not at all satisfied,” up from 67 percent in December.
Because of their dissatisfaction, 78 percent of real estate agents said they were “not likely” or “not at all likely” to refer buyers to the lender for future home purchases.
ForeclosureRadar.com’s Short Sale Report offers a five-star rating system for lenders’ short-sale success or lack thereof and CAR offers ShortSalesCalifornia.org to rate lenders, but DiBenedetto says it’s still a crap shoot.
“This is what slicing and dicing home loans [bundling mortgages as securities sold to investors] on the secondary market has done to the process. You are no longer talking with the actual owner of the loan. You can have one short sale with a particular servicer that goes really well and another with the same servicer that doesn’t go well at all,” she said.
The latter is the norm, according to CAR’s survey.
ยช Broderick Perkins operates a digital real estate news service, the DeadlineNews Group. Contact him at broderickperkins@deadlinenews.com or visit www.deadlinenews.com.
Article source: http://www.thecalifornian.com/article/20110826/LIFESTYLE/108260326