News for UK buyers of Orlando property
Offers may roll in, but banks often slow to respond, prompting
buyers to walk away
A few years ago, few people in the housing market had ever heard of a short
sale. Mention the term today and people, whether they are homeowners or real
estate agents, just roll their eyes.
The practice, which involves selling a property for less than the amount
owed on the mortgage, has grown in popularity as an exit strategy for
financially strapped homeowners because it doesn't ding a credit report as
deeply as a foreclosure. But because the transactions have to be approved by
first and second lien holders, they are languishing.
According to a survey by Campbell Communications, two out of three short
sales never close.
The process of getting a short sale approved involves a packet of documents
that includes bank statements, tax returns, letters explaining any other
sources of income and a hardship letter explaining why a short sale is being
sought.
After the packet is submitted to a mortgage servicer, it has to be entered
into the system, a person has to be assigned to it, and an appraisal has to
be ordered for the property. On average, it took loan servicers 9 1/2 weeks
to respond to a short sale offer, Campbell's survey found. Also delaying the
process is that if a home can't be saved, servicers are keen on trying to
recover as much as possible for what could be multiple investors and that
requires a fair amount of due diligence.
However, with so many distressed properties for sale, and other homes
selling conventionally at drastically reduced prices, there's a wealth of
inventory available allowing buyers to get a quick yea or nay to their
offer.
Posted: 20 September 2009
Source: Chicago Tribune
Click here for original article