For Buyers, For Sellers, Mortgage & Financing

Lenders And Short Sales – Are They Hampering The Rebound Of The Housing Market?

Currently in our market (Ocean City, Maryland and Worcester County), there are 78 pending “short sale” transactions as reported to our local Multiple Listing Service.  I have 2 short sale situations that have been pending since 3/30/09 and 4/1/09 respectfully, with no response back from either lender.

Is the time it is taking to process short sales hampering our market rebound?

My answer is…without question!

Consider the following data

*In 2008 a total of 1167 properties changed hands thru our Ocean City/Worcester MLS.

*At present, we are 10-15% behind where we were at this same point last year.

*The 78 pending short sale situations will account for about 10% of the total sales for this year.

*That does not account for any future short sales that go under contract between now and the end of the year, all waiting for lender approval.

I am not even considering the many buyers who have walked away from their potential short sale purchase because they got fed up with waiting so long.

It seems there should be a way to streamline the process for lenders.  All lenders should be using the same forms, same process, etc.  What about a “clearing house” for all lenders nationwide to process these loans?  One of my short sale sellers said the reviewer for her case has 300+ cases to review!

I have heard many different dollar amounts (anywhere from $5,000 to $15,000) that flow into the system from the sale of a property.  Multiply that number by the huge amount of short sales waiting to get processed…and we could very possibly see a rebound in the housing sector.

If real estate contributed to the situation we are in…maybe real estate can get us out!!!