For release:
July 21, 2011
Short-sale process broken, pushing Central Valley families into foreclosure,
REALTOR® survey shows
Latest lender satisfaction survey highlights glaring issues in short-sale process
FRESNO, CALIF. (July 21) – More than half of Central Valley REALTORS® characterized closing short-sale transactions as “difficult” or “extremely difficult,” according to a Lender Satisfaction Survey conducted by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). The survey gauges REALTORS®’ experience working with lenders in their most recent transaction. The majority of those surveyed dealt with short-sale transactions – transactions in which the lender or lenders agree to accept less than the mortgage amount owed by the current homeowner.
“The survey results demonstrate the ongoing problems homeowners are experiencing with onerous short-sale procedures on the part of lenders and servicers,” said C.A.R. Treasurer Don Faught, who presented the findings today at a news conference in Fresno, Calif. “Despite assurances by lenders in recent months that they would improve their short-sale processes, clearly, not enough is being done. Lenders are out of touch with the realities of the market and the consequences to struggling homeowners, and the result is unnecessary foreclosures that only make California’s economic problems worse, hindering a desperately needed recovery.”
The top three obstacles REALTORS® most frequently cited in working with lenders and servicers during the short-sale process include lenders’ slow response time to a short-sale package, repeated requests for documentation, and poor communication with lender representatives. Some REALTORS® even indicated that the lender foreclosed on the home before the short-sale transaction could be completed.
Some specific REALTOR® comments from the survey include: “Bank will not come down on price; home needs work, but the bank is being unrealistic.” “Banks say they want to help work things out on short sales, but to be honest, I don’t believe they care.” “The whole process is completely flawed.” “The bank took over four months to give approval. They refused to pay common seller closing costs and repeatedly demanded paperwork that had been sent previously.”
Nearly three-fourths (74 percent) of REALTORS® said it took more than 60 days for lenders or servicers to return a written response on the approval or disapproval of the short-sale agreement submitted. And, half of respondents said it took the lender more than five days to return any form of communication.
Overall satisfaction with the lenders REALTORS® worked with in their most recent short-sale transaction remains extremely poor, with 77 percent saying they were “not satisfied” or “not at all satisfied.” Moreover, almost nine in 10 (88 percent) REALTORS® said they were “not likely” or “not at all likely” to refer buyers to the lender to finance future home purchases. [more from C.A.R.]
The above article was reprinted from the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)
Stockton Real Estate – Dave Thurman
