This morning’s RE/MAX update included an article from founder/chairman Dave Liniger. The headline was that there needed to be more short sales in 2011. The gist was there needed to be more successful short sales and for this to take place loan servicers need to have better processes in place.
It’s rare I find myself disagreeing with Dave – he has forgotten more about real estate than many of us ever will know – but I do believe he’s wrong here, if only because I’ve reached the conclusion that lenders and loan servicers are fundamentally incapable of becoming adept at processing and approving short sales.
Their incompetence is self-created from a basis of apathy. Lenders have nearly zero motivation to approve short sales; if the argument about the lender seeing a lesser bottom line loss on a short save versus a foreclosure mattered, the processes would have improved immediately. Because there’s no motivation to approve these sales, there’s no need to put together a coherent, comprehensive, viable process.
There’s no sense dangling sellers and, less importantly, buyers along for months on end just to see the house end up exactly where it was headed in the first place – being sold in a trustee’s office or on the courthouse steps as a foreclosure.
Stop the illusions. End the short sales.