The Ugly Side of Short Sales

I have recently been writing about the benefits of short sales in my weekly column at Rocklin & Roseville Today which is also carried over at Sacramento Today. The column today was, “Sacramento Short Sales – Good for All.” I really do believe short sales are win-win transactions where more than just the homeowner and lender benefit but there is an ugly side of short sales too.

Our team at MagnumOne Realty has been successfully completing short sales for the past three years. We have worked with almost every lender, we know what we are doing, have a strong process and we believe have a great reputation for getting them done. When you read my column today and I explain the benefits to the lender in accepting a short sale you would have to believe that our job as Realtors in working with lenders would be easy. That is so wrong!

Dealing with the lenders can be a nightmare and we treated as the enemy by most. The employees we deal with at the lenders for the most part treat us as if we are stealing money from them and should not be trusted.

I do understand that lenders are only as good as their employees and with the growth of short sales they have not been able to keep up and many of their employees are swamped with work. We were recently told that when Bank of America took over Countrywide they increased the file load on the short sale negotiators by more than 100 percent. Each negotiator now must follow 350 files. It doesn’t take a rocket scientist to figure out not much time can be given to a request.

Our experience with BofA/Countrywide is horrible. They misplace faxed information; they make you wait on hold when you call to get updates, of which they generally don’t have. They tell you not to call back until some date in the future that is beyond the trustee sale date and the thing that frustrates me the most is the inconsistent messages. We called to get an update on Monday and were told by the CSR that there were no new notes from the negotiator for the past 30-days so we could escalate the file to get attention. Naturally we agreed and were told to call back on Tuesday afternoon because it would take 24 hours to get a status update placed in the file notes. On Tuesday afternoon we called to get the update but were told escalations can take up to 48 hours and to call back tomorrow. On Wednesday, believe it or not, there was no update and we were told escalations can take up to five days so call back next Monday. Clearly their process is broken, there appears to be no effort to improve and it is almost impossible to find anyone who seems to care.

Some are better and a few even worse than BofA/Countrywide but the bottom line is most lenders have not figured out the cost/benefit of short sales and lose money every day by not adding staff and resources to their short sale departments. It makes our job of helping them and our client much more difficult.

If you are a Realtor or someone who deals with lenders on short sales, I’d love to share your stories here. Send them to me at juliej@jalone.com. Later this week I’ll write about some of the other lenders worse than BofA and a strange process at Wells Fargo.