Why do banks and lenders obstruct the short sale process?


Borrowers and realtors looking to make profitable purchases through a short sale process have been obstructed by banks who, in hope for getting higher return of their investments, postpone the foreclosure auction several times in a row and procrastinate.

Investors dealing with short sales have commented that banks and lenders are too slowly accepting the fact that properties that used to cost $150,000 are now appraised t $80,000 and the highest bid is often only $60,000. House market depreciation is hue and some banks refuse to take the fact they lent money for twice the current market value of a property.

Common Short Sale Process Time Schedule

Even if a relatively high bid is made, banks have difficulties accepting a short sale. Often, a relatively competitive short sale bid will be turned down after months of research on the part of the loss-mitigation department of the lender. After a foreclosure auction, no one will get even closer to the original short sale bid and the bank will reject the foreclosure. The house ends up with the desired price as big as the original short sale bid ... half a year later. The short sale process may take from 6 months to two years and there is no guarantee the short sale offer will be accepted, if the bank is really determined to wait for a higher bid.

In the short sale process procrastination homeowners are terribly affected even if they are being involved and actively looking for buyers, or hiring real estate agents to assist them in the process. In the end, foreclosure takes place, homeowners lose their homes and any equity whatsoever; and banks add in another property they don't need to the loss mitigation department.

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