Real estate short sales provide an unusual opportunity for a banking system flawed with incompetence and greed. It absolutely makes no sense for would be homeowners to even consider making an offer to purchase a short sale property. The process is supposed to help delinquent owners of short sale properties avoid foreclosure by allowing them to sell their homes before they go to auction, but does it really? Anyone familiar with the process will tell you that purchasing a short sale property is not only frustrating, but a very long, and sometimes, never ending process. Normally, if a person makes an offer to purchase a home, that buyer can assume that escrow will close within thirty days or less. This is not the case with a short sale. The length of time for a short sale to close escrow can be as long as six to eight months if home buyers wish to wait that long.
Its obvious that mortgage lenders who hold the liens on these short sale properties are not in a hurry to sell them or get their money back. And why should they? They are being fed intravenously with taxpayer money. Unfortunately for buyers and sellers, mortgage lenders have the final say on the terms of these sales. What’s ironic is that the same American taxpayers who are being disenfranchised by this entire process are bailing them out financially.
What makes matters even worse is that mortgage lenders are capable of selling their loans to the so-called secondary market made up of individual investors. Once a mortgage lender sells a homeowner’s loan to the secondary market, it becomes very difficult to track down who the individual investors are and get them to agree to the terms of these short sale transactions. Most investors expect to make a dollar out of fifteen cents, not the other way around. They have a hard time accepting the fact that property values are much less than the mortgage notes that they originally purchased when the market was booming. Quite often investors will reject the terms of a sale even when the appraised value of the property matches the sales price. Hence, the situation changes from need to greed and nobody wins.
