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If there is one area I really support the government getting involved in real estate, it would be cleaning up the short sale procedure of the banks. I say this only because the banks have proven themselves quite inept of being able to do it themselves, or even run a business in general.
Bentlebee, first of all the Realtors aren't the making the demand, it's coming from the 2nd lien holder. However, you have a good question and the 2nd lien holder puts the Realtor in a bind. I'm not going to say right or wrong, but I'm simply going to pose 2 common questions and let readers draw their own conclusions. Realtors know that banks won't consider a short sale unless a payment has been missed. If there is a legit short sale need, should the Realtor suggest the seller miss a payment? Legally, probably not a good move. Morally, you tell me. Now jumping ahead we have a chance to avoid foreclosure but only if someone pays the 2nd lien holder something but it can't be on the HUD. The buyer wants the house, the seller avoids foreclosure, the agent gets paid. Alternatively, if it's on the HUD the deal is dead or if it's not paid the deal is dead. Legally, it can't be paid but if it is buyer gets a home and seller avoids foreclosure. What is in the best interest of the seller in that scenario and how should the agent advise? I don't know, just asking so you tell me.
Realtors aren't doing it as much as taking it - in the shorts.
We work hard - for months, calling every week, faxing authorization letters, forms, updating financials over and over.
Only to get an approval letter from the first that doesn't let the 2nd have any. Or the second waits until we have approval for the first and demand 10% - or flat out say no.
The 2nds relish their roles as the spoiler.
The sellers want out, buyers want in. Banks have idiotic processes.
We didn't get in bed with the banks, we didn't cause the lender to make "bad" loans (a lot of these are refi's) we did not cause the economy to falter.
I have never seen such insanity.
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