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Showing posts with label mortgage insurance. Show all posts
Showing posts with label mortgage insurance. Show all posts

July 28, 2011

Lengthy Short Sale Process a Painful Reality

Hi Folks,
   How is everyone today?

   The National Association of Realtors (NAR) just released their "Pending Home Sales Index" (PHSI) for June, which reflects "When the contract has been signed", but, "the transaction has not closed". The figures came in at 2.4% above May, and 19.8% above June 2010, with the biggest increases from May to June were in the South and the West,

   Now, if you were not aware, the PHSI is a "forward-looking indicator", which assumes about 2 months between the contract signing and the closing. The question this raises in my mind is the following; what about the lead time for short sales from contract to closing? These have been trending longer, and according to a recent story, "Short sales are among the most arduous real estate transactions, often taking six months or more to close -- if they get done at all".

   In the story written by Greta Guest for the Detroit Free Press, and titled, "Shortsales, longwaits: Buyers and sellers find process frustrating", Guest cites an agent in Oxford, Michigan, who worked on a short sale that stretched eight months. Michelle Chappell, an agent with Real Living John Burt Realty in Oxford, said that after the process which she called "heart-wrenching" for her buyers, she said, "This was the last one I sold. I said no more. I won't do it.". Chappell reflects a growing number of Realtors that are avoiding short sales because they can be so difficult, writes Guest (she aptly uses the term, "Short sale shy")

   Why such a long process?

   "Homes with more than one mortgage and mortgage insurance tend to take the longest", said Ellen Mahoney, president of Complete Title Services' loss mitigation division in Birmingham, Mich, writes Guest. She adds that a "growing reason short sale deals fall through or take longer" is because of mortgage insurance" purchased after the homeowner closes on the deal and the loan is later sold to other lenders and investors.".

   Other factors also contribute to the lengthy process, but ultimately, as Guest writes, "These kinds of delays mean buyers walk away because of the time and frustration involved."

   What do you think would trim down the time? Perhaps a standardized process (like the one the Government has tried to implement without success to this point, yet)?

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Have a Great Weekend, and Happy Rent-to-Owning !
Rob Eisenstein
HomeRun Homes Blog: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com

TAGS: #shortsales #lossmitigation #mortgageinsurance #realtor