Calif. Survey Cites Flaws in Short Sales
Fewer than three in five attempted short sales succeed due to a difficult-to-navigate process, according to the California Association of REALTORS®' recent member survey.

The problems center around lack of response from lenders on a short sale offer, which often takes 60 days and sometimes up to six months, the survey showed. The prolonged process causes many buyers and sellers to ultimately give up.

The survey found that 94 percent of CAR real estate pros had participated in a short sale transaction last year. The most common problems they faced included unresponsiveness of lenders, onerous procedures, and long processing delays.

CAR is trying to get the public to join in its fight to change the process. It’s running a letter in several large California newspapers about the flawed short sale process. CAR argues that uniformity among lenders about what they require to approve a short sale is badly needed, particularly in situations where more than one lender holds a mortgage on the same home.

"It is never going to be a painless transaction,” says Dustin Hobbs, spokesman for the California Mortgage Bankers Association. “It is far more complex than a typical purchase because you have so many factors at play. You are asking the lender and investor to take a loss, which is not something that is easily decided."

Source: “‘Short Sale' Process Under Fire,” The Press-Enterprise (March 9, 2011)

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Quiz: The Ins and Outs of Short Sales