Realtors: Lenders Making It Tough To Do Short Sales

Reuters reports:

• Realtors in many U.S. states say lenders are demanding excessively high prices before allowing distressed borrowers to offload their homes in "short sales," making the housing crisis worse. In a short sale, a borrower dumps the home at [sale price] below [the existing balance on the mortgage] and the bank forgives the rest of the debt. The borrower's credit rating is hurt but for less time than in a foreclosure. Such sales have been touted by banks as a way out for homeowners unable to pay their mortgages.

• But Realtors complain many lenders harm their own interests by refusing to accept bids below internal targets, even though that may eventually force lenders to sell homes in foreclosure, where bids are usually far lower. In addition, many lenders simply do not have the people or processes in place to handle a swelling tide of short sales around the country, Realtors say. As a result, lenders are taking far too long to evaluate offers, leading many would-be buyers to walk away from deals.

For more, see Realtors complain short-sale process is failing.

See also:

• MarketWatch.com: Why Lenders Are Leery Of Short Sales,
• Mortgage News Daily: Real Estate Investors and Agents Decry Short-Sale Process,
• Realty Times: Lenders' Worst Enemy in the Short Sale Arena,
• Minneapolis Star Tribune: Foreclosures become more than some bargain for (Buyers seeking quick deals on bank-owned homes are losing out to the industry backlog).