Short sales are a stall so that the lender can make their 3.5% risk free returns on the TARP cash we the taxpayers gave them without conditions. They are guaranteed profits upon which to earn bonuses and the housing market is still suffering. The short sale charade is a cruel joke on the unsuspecting owner who is distressed and now believes that he has the house sold only to find a friendly sheriff serving foreclosure papers after months of unanswered phone calls. The REO gets sold at a much lower price than the short sale would have been, but hey, they made risk free earnings which translate into bonuses which become campaign contributions. We have an election year coming, you know.
The looting of America continues.
The above is a quote of a comment made to one of my earlier posts about short sales. Thomas Johnson wrote it. He's an excellent blogging Realtor based in Houston, Texas. You can http://erahouston.com/.
I think Tom's comment is dead-on accurate.
I don't have any proof of this but my gut tells me there's a darn good reason the banks take so long to make short sale decisions, and so often turn down the offer they receive. They're getting TARP money or insurance payouts or something!
I've got one short sale listing myself right now. The first lender has been really pleasant to deal with and is offering $3,000 to the second lender.
The second lender? First they said they wouldn't settle for less than $10,000 on a debt of $60,000. Shortly thereafter they sent me an email that said they wouldn't settle for less than 60% payoff. Their most recent missive says they won't even consider settling for under 30%. Regardless of the number they claim is their minimum, they say they'd rather take $0 than settle for less than their minimum.
On what planet does that make sense??! Second lenders are 100% wiped out when the 1st lender forecloses on the homeowner. Homeowner gets foreclosed on, the second lender gets bupkis, nada. How is it better for business to take $0 than to take the $3,000 the 1st lender is offering them? I don't get it.