Eric Wolff wrote an interesting article in the North County Times on Sunday, April 10. In the article, he states that according to local Realtors®, the short sale logjam could finally be clearing a bit. I’m quoted in the article (as are my Realtor® friends Diane Conaway of Re/Max, and Sidney Kutchuk of Realty Works).
The article discusses the fact that there has been significant improvement with respect to short sales and short sale processing at the banks. While I agree that this is true, I’d have to say that there are still “miles to go before I sleep” (You recognize the Robert Frost quote, don’t you?)
Anyone who has been processing or negotiating short sales for a while will certainly recognize that there has been significant improvement since 2007. In early 2007, it took months to even to get a call bank from a negotiator at Bank of America. Now, there are policies and procedures not only for processing short sales but also for uploading documentation and even for escalation.
When Wolff, the author of the article, first phoned me, he asked about short sale escalation procedures and wanted to know whether I believed they were effective. Pardon my candor, by the answer is ‘no.’ Short sale escalation procedures at most of the major lending institutions still appear to be pretty ineffective. Only the strong and tenacious real estate agents and short sale negotiators who call over and over and leverage their own personal contacts see significant and ongoing success with large volumes of short sales.
It’s true that things have improved in the short sale arena. But, the system is still far from perfect. And, given the significant problems with regard to foreclosures and document verification, it appears as if many of the lenders who might have opted for foreclosure may now actually be more seriously consider short sale.
So, what would a significant increase in short sales do to the mortgage lenders? Would they be equipped to handle a further increase in short sale submissions? Bank executives know how to talk the talk and walk the walk. Sadly, however, the sheer number of qualified employees required to process these short sales pales in comparison to the number of qualified employees currently on the job.
So, is the logjam clearing and will banks be able to hire enough staff to continually improve the housing industry as quickly and efficiently as possible? Let me shake my Magic 8 Ball and see. Uh oh. “Outlook not so good.”