Home > Uncategorized > The Banks Have Too Much Testosterone!

The Banks Have Too Much Testosterone!

As a short sale facilitator who has processed hundreds of requests for struggling homeowner’s, I can’t tell you how many times we have successfully obtained approval from the Seller’s lender only to have “lost” the buyer. While one would think that losing a buyer would occur because the process took too long, that is simply not the case. On numerous occasions we have facilitated bank approval of a short sale in less than 30 days only to have lost the buyer.

In every case (except for one smaller bank in Arkansas) getting an extension for an already in place replacement buyer was quite a challenge. Some lenders threaten to start the process all over again saying that a whole new package needs to be re-submitted — even if the new buyer is paying cash! Are you kidding me? How much additional time and money are the banks looking to expend?

Let’s see, if the new approval arrives in 45 days and the transaction takes an additional 15 days to close from there, then we are talking about 60 additional days. If the average Principal and Interest payment is $1000 per month then the bank is “throwing away” $2000 per property. According to the Certified Distressed Property Institute, there are an average of 3+ contracts for each short sale and each short sale negotiator is working on hundreds of files at any given time. This wasteful spending by the banks is staggering! And guess what, the upfront money is not even their’s — it’s your’s — via bailout and TARP funds. This is crazy!

What’s the explanation from the banks? Well, that’s the best part … THEY DON”T HAVE ONE! It appears like they are merely pumping their chests and saying, “Look at me, I’m still in control.” While it’s true that they (and the investor) have ultimate control over the short sale process, the fact remains that the banks have too much testosterone. It seems more logical to me that they should put their emotions aside and approve the new buyer, as long as they are arms length away, as quickly as possible.

Note: I mentioned previously that there is one bank that understands the process. They are a smaller bank located in Arkansas. We submitted a short sale request to them in late November and received an approval in less than 2 weeks. When the buyer fizzled out because of financing challenges we resubmitted the request, with a lower sale price, and received an approval within 4 business days! It’s nice to know that this bank understands that time is money.

I’d be interested to hear from anyone who has had the same or similar experience(s).

If you’d like a Short Sale expert to package and handle all the paperwork and communications with the lender in an attempt to facilitate a short sale on your behalf, at no out of pocket expense to you, contact Rick Schuster at   561-893-0077   or rick@homeguardiantitle.com

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