Reality is that if you are dealing with real estate transactions you are going to be faced with having to deal with short sales. The majority of the homes on the market are still distressed properties whether they are foreclosures or short sales. Personally I cannot wait for the day when short sales are part of the history books and or when they do come back into fashion I am pretty much retired. Anyone that has dealt with enough short sales, knows that they can be a little challenging. Trying to get the bank to approve the short sale is never fun, but what is even less fun is trying to get a transaction on a home that has two loans and getting the second in agree is even less fun.
Another reality is that if the home owner is doing a short sale on his home for what ever financial reason that he can no longer keep the home, there is little to know equity or value in the home. The home is upside down on value and more than likely if they are two loans on the property the loan in second position more than likely will get little to nothing on what is owed to them. Typically the way it works is that you must get approval from the first before you can even attempt the approval from the first since the first in is in first position. Not only will you get approval from the first loan, before moving on to the second loan the first loan will also dictate how much the second can receive. Since the first is also more than likely not going to receive the full balance of what is owed on their loan.
Now I know that there is a lot of advertising and publicity about how banks are now more responsive to homeowners. There is even some legislation or proposed legislation to get the banks to become more responsive to the short sales we have. There is even material out there explaining how a short sale transaction is even more beneficial for the banks to do than a foreclosure. Now if that is the case one has to wonder why do some banks push for foreclosure or prefer that the homeowner go into foreclosure versus granting the short sale approval.
I have been dealing with a short sale transaction on 2021 Mariah Dr. , in Santa Maria, Ca. with Chase bank now for months. Now the first has agreed on to the transaction. Now I am the third agent working on this the first two pretty much gave up since Chase would not allow the short sale to take place. Each and every time it has been Chase bank that as stopped this short sale from happening. To the point where the representative has even advised the client your best option is to file Bankruptcy. Now Chase bank is in second position and knows very well how the short sale process works this is not their first short sale transaction as I am sure not their last. Now Provident bank that is in first position has been more than cooperative in getting this done. Chase bank that received tax payer funds has done nothing but stalled and stopped this short sale from happening. Chase bank one of the largest banks in the country has been reacting as if they have never been involved in a short sale transaction where they have been in second position.
Typically $6,000.00 is what the lein holder in first position typically allows the second to receive. Chase bank has even agreed to settle on a specific dollar amount only to later increase that dollar amount stating that the previous dollar settlement was no longer valid. Only to make the transaction even more impossible. According to the representative of Chase Bank since the real estate agents are making more money than they in the transaction they are. So they felt the need to increase the dollar amount to close the transaction to $24,000.00. It is unbelievable that this is the stance of one of the largest banks in the country to halt everything because the real estate agents are making more than they are. As well as offering or insinuating to the homeowners that they are better off to file bankruptcy. Why a bank that has already charged off this account and has basically considered this a loss and yet will not even let the client out of the lien. Is something that should be asked, whether there is an ulterior motive for the clients to just let this home go to foreclosure or is this the bank’s way of showing it is acting in a vindictive manner towards its former clients. As well as holding their financial situation hostage and forcing them to let the home go to foreclosure and file for possible bankruptcy since the loan on the home is a non-purchase money loan.
The problem with short sales is that they are anything but short. But it would be nice if all the banks were truly as responsive as all the marketing materials they seem to promote. As well as all the rhetoric that the govt. seems to promote as well to getting the banks to become more responsive in handling these transactions. So the sooner all these distressed properties can be flushed out maybe the sooner we can actually be on to a road of recovery.