Slow short sales firmly part of California real estate landscape
The California Association of Realtors is reporting that 94% of its members participated in a short sale in 2010, despite the mortgage product being tough to close.
Fewer than three of five short sales close in California, according to a Short Sale Lender Satisfaction Survey conducted by the trade association and released Tuesday.
Realtors report that short sales are plagued with mortgage lender and servicer unresponsiveness and "onerous" procedures leading to long processing delays.
Efforts by larger lenders to streamline the short sale process appear to be slow in coming, the Realtors report, adding its due to no fault of their own. Last April, Wells Fargo ($40.16 0.055%) said it was looking at ways to reduce short sales bid-to-close windows to about 30 days.
"It’s disappointing that less than three in five short sales close, despite every effort by the Realtor, home seller and potential home buyer," CAR President Beth Peerce said.
"Many underwater homeowners who have been hit by the recent economic crisis can no longer afford to stay in their home and just need to sell their home as expeditiously as possible are unable to largely because of the complex and cumbersome short sale process," she said.
Some 63% of Realtors said lenders took more than 60 days to return a written response of the approval or disapproval of the short sale agreement submitted. Only 4% said they received a written response in less than two weeks.
"The survey results show that the short sale system is clearly flawed and must be standardized and streamlined to reduce the inventory of foreclosures," Peerce said. "Increasing the number of successful short sale transactions is one important way we can help California families avoid foreclosure and move our economy closer to recovery."
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