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Old 11-11-2011, 12:51 PM
 
332 posts, read 709,914 times
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Can someone take me through the process of why it takes so long? I have heard it can take 6 months or longer to purchase a short sale or foreclosure?

My question is....why? The banks are losing money on all of these houses and excess inventory anyway, since most likely the current owners aren't paying their mortgages, so wouldn't they want to get new buyers into these properties as soon as possible?

Why is it so dragged out?
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Old 11-11-2011, 01:17 PM
 
929 posts, read 1,755,306 times
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Quote:
Originally Posted by Logical95 View Post
Can someone take me through the process of why it takes so long? I have heard it can take 6 months or longer to purchase a short sale or foreclosure?

My question is....why? The banks are losing money on all of these houses and excess inventory anyway, since most likely the current owners aren't paying their mortgages, so wouldn't they want to get new buyers into these properties as soon as possible?

Why is it so dragged out?
Short sales just add a mess of documentation to the process. You go see a house and you like it, you put an offer, and they accept. Here is where the fun begins. So, now you have to get approval from the bank that they are willing to accept the reduced payoff to the seller's mortgage. The seller now needs to prove a hardship and that they can't, in effect, pay the difference. Also, the bank would have to make an arrangement with any secondary lien holders and this back and forth between multiple banks (which seems to be fairly common considering how many people have Equity Loans) makes for a huge mess.

Then, while this takes months of waiting you have to go through the underwriting process with your own bank. Lock in your rate and hope that the other side doesn't take longer than your lock in. Months later the seller's bank will tell you that it's a go and you have to rush to closing. Or, after months of waiting they tell you that your prices is too low or they have a better offer.

IMHO, it's not worth it unless you are paying cash, have it written into the contract that they can only submit your offer, are not selling a corresponding property, and have somewhere to live that isn't time sensitive.
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Old 11-11-2011, 01:46 PM
 
Location: Former LI'er Now a Rehoboth Beach Bunny
7,243 posts, read 9,593,264 times
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By the way I heard on the tube that LI foreclosures are taking 982 days start to finish on Long Island. UGH!
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Old 11-11-2011, 02:25 PM
 
4,963 posts, read 3,925,200 times
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Thats right. I wish the banks would just give up and accept the offers immediately. Wouldnt it be better than to sit and not get paid for years. To take 3 years to foreclose on a house is really hurting the real estate market.

Its a total disgrace ; we bailed out these banks and now they are holding all the cards
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