Short Sales Category

A Bank Executive Explains Slow Response to Short Sale Offers

Category: Ask Lani, Real Estate News, Short Sales and posted on November 12th, 2010

short sales lowell international realty Lank Kahn Drody Miami Real EstateI recently attended the annual National Association of Realtors’ Conference in New Orleans where I heard a very informative talk on Short Sales by Senior VP at Bank of America, Matt Vernon. He addressed the crowd of Realtors who were very vocal about their frustrations with the amount of time it takes to hear back from a bank when an offer is submitted on a short sale. Mr Vernon explained the decision-making process to us and detailed the efforts his bank has made to improve it.

A bank like Bank of America is the service provider for a loan.  It is the bank’s investors that make the ultimate decision about whether to move forward with a loan modification or a short sale.  The investors can either decide to maintain control of these decisions or to delegate them back to the bank.  Currently, most of Bank of America’s loan’s fall under the non-delegated category meaning that they have to package the loan modification or short sale request as best as possible and then wait for a decision from their investors.

Bank of America admits to being understaffed when the flood of short sale and loan modification requests began a few years back. They have since tripled the number of employees dealing with distressed loans.  Mr Vernon stated that BOA is now averaging 50 days for short sale notification.  Their ultimate goal is to set up “cooperative short sales” where agents, borrowers and banks are all working together from day one to set the list and acceptable sales price so that the days of waiting on a word from the bank will be over.

It was certainly helpful to hear from Mr. Vernon about the ins-and-outs of the short sale process. Short sales are certainly not going away and it is crucial that banks and their investors get together to solve the problem.

posted by Lani K Drody // Leave A Comment