As if short sales weren’t already taking forever to get approved there is currently a belief that lenders are holding off on approving short sales until the beginning of next year.
Why would they do this? Incentives. Once they accept the short sale they have to take a loss – the difference between what the the real estate is on their books at and what the short sale price is. And these guys don’t want to take the loss this year because it will affect their earnings and their bonuses and their stock price. I used to work in the corporate world and I have witnessed first hand the bad decisions which are routinely made for personal gain. So, personally, I completely believe this story.
You might want to think twice about putting an offer in on a short sale if you would like to get an answer in the next 3 – 4 weeks. At the very least find out what the listing agent’s expectation is about turnaround time.
0 thoughts on “Are Short Sales Dead Until January?”
Well, unless banks all have calendar year ends I don’t believe this story. Most corporations are on a fiscal year end basis not calendar. They profits would be determined at the end of their fiscal year end. Are banks required to operate on a calendar year end?
Banks are not required to operate on a calendar year basis. However, most do. For example, Countrywide, which did a ton of bad mortgages, was acquired by Bank of America, which is on a Dec 31 fiscal year. Washington Mutual, another dumb lender, was acquired by JP Morgan Chase, also on a Dec 31 fiscal year.