Home/Mortgages/CAR Survey Finds Short-Sales to be a Difficult Process

August 3, 2011 (Jeff Alan)

A recent survey conducted by the California Association of Realtors® (CAR) found that more than half of Central Valley Realtors characterized closing short-sale transactions as “difficult” to “extremely difficult.”

The three most frequently cited obstacles Realtors® had to contend with during the short sale process were slow response times to a short-sale package, repeated requests for documentation, and poor communication with lender representatives.

Seventy-four percent of the respondents said it took lenders and servicers more than 60 days to return a written response on the approval or disapproval on submitted short-sale agreements.

Half of the respondents noted that lenders took more than five days to return any form of communication.

The survey gauged the Realtors® experience working with lenders in their most recent transaction. Most of the Realtors® surveyed dealt with Bank of America, Wells Fargo, and JP Morgan Chase in their most recent transaction.

“The survey results demonstrate the ongoing problems homeowners are experiencing with onerous short-sale procedures on the part of lenders and servicers,” said C.A.R. Treasurer Don Faught, who presented the findings today at a news conference in Fresno, Calif. “Despite assurances by lenders in recent months that they would improve their short-sale processes, clearly, not enough is being done. Lenders are out of touch with the realities of the market and the consequences to struggling homeowners, and the result is unnecessary foreclosures that only make California’s economic problems worse, hindering a desperately needed recovery.”

Poor lender performance could also lead to a loss of future lending transactions as 88 percent of the Realtors® said they were “not likely” to “not at all likely” to refer buyers to lenders they had problems with to finance future home purchases.

In addition, 77 percent said they were “not satisfied” or “not at all satisfied” with their lenders in their most recent short-sale transaction.

Tags: CAR®, Realtors®, short-sales, documentation, poor communication, lenders, mortgage servicers, out of touch