In most cases it is better for the Lender to do a Short Sale than foreclose on a Home. Then why do they take such a loooooooooong time to get an approval for a Short Sale (SS)? Here is what I see as some of the advantages of a SS:
· They lose less money!
· Close Quicker = get money back Quicker and use that money Quicker.
· Less damage to the Home, by the time the Home gets foreclosed on some people take everything they can out of the Home like appliances, lighting and plumbing fixtures, etc. or damage it.
· They would have to worry about vandalism, more damage to the home or squatters.
· Extra HOA fees and taxes.
A lot of the time they take so long on their decision that they lose a qualified Buyer because the Buyer does not want to wait that long or the Home has depreciated more that what the Offer was when it was first made and the Buyer does not want it any more or the Home will not appraise which makes the selling process longer or the Home gets foreclosed on which then adds to the Lenders list of REO’s.
And the reputation is such that SS takes too long or won’t close so, which feeds on itself creating a cycle and perception that SS do not close. It seems to me that a lot of the negotiators know this but, are hostage to the policies and procedures of their Management and cannot do much to change it. Realtors also, do not like to show SS for these reasons and that helps add more to the REO inventory and with more and more REO’s, that creates more and more inventory on the market and prices continue to decline thus continuing the downward cycle.
So can someone tell me Why the Lenders continue to make it so difficult to get a SS Closed???