It’s good to see short sales eclipsing REO (finally). Especially on the heels of our launch of www.VerifiedShortSale.com.
As recently reported by RealtyTrac, 12 states saw more short sales than REO transactions through March, and they expect to report that short sales will outnumber REO sales nationally when they report second-quarter statistics.
As we expected, banks and other investors have embraced that there is value in averting a foreclosure. Short sale numbers are growing. But as an industry we’re still far from where we need to be. The primary challenges in getting short sales to the closing table haven’t changed and it seems nobody cares all that much.
What challenges am I talking about?
Misrepresentation & Valuation.
Perhaps it’s all the growing awareness from Consumer Financial Protection Bureau (CFPB) endeavors shining the spotlight on the consumer experience.
Doesn’t anyone realize that the bank or servicer’s customer isn’t the only consumer in a short sale?
We should be focusing our attention on today’s home buyers. They’re the folks stuck on the outside of this hugely inefficient process, wondering what takes so long to get a bank’s response to a great offer and questioning why in the world a bank would reject a market value offer today only to eventually foreclose and sell a property much later for much less.
To be fair, the average buyer (and the average agent for that matter) isn’t schooled in short sale process and procedure. They don’t recognize that the single biggest determining factor for any short sale to be approved is that the outcome is determined to lose less money for the note owner that a foreclosure.
Of course the borrower in default has a right to be treated fairly in the process. Of course we want homes in our neighborhoods to remain occupied and not become vacant. Of course we want to see property values improve.
But in order to improve loss severities while treating consumers fairly we need to make some wholesale changes in the way these transactions are handled.
We need to speed transaction times. The buyer willing to pay the most for any real estate is willing to wait the least amount of time for a decision.
We need to know who we’re dealing with right up-front. Is the borrower engaged in the process? Is the buyer real? Is the buyer related to the seller? Is there more than one potential buyer? Is the borrower stalling the process?
We need to ensure that properties are sold at today’s true market value. Not the listing agent’s BPO value. Not an appraiser’s opinion from 3 months ago. We need to see all offers from all buyers in real time, not just the one offer that the listing agent decides to share with the bank.
And we need to embrace technology that provides transparency and clarity in order to combat misrepresentation and resolve valuation concerns; technology that keeps everyone engaged and accountable throughout the transaction so that closings happen on time and without last-minute surprises that send a deal sideways.
VerifiedShortSale ties everything about each short sale together perfectly for the bank or servicer and wraps it with a big bright bow.
That’s what we do. We do it because it’s the right way. We help banks become information-rich and short-sale savvy. Our systems give our customers data points that make sense. And when you have the right information, anything is possible – even a market turn-around.