A recent business week article titled “Shortsales: A Fraying Lifeline for Homeowners” discussed some recent change in philosophy for banks regarding short sales
In this article the author highlights a recent trend with some banks who are now taking a new tact regarding the approval of short sales. In the past, banks with a red profit line have tried to move short sales along so that they could improve cash flow. In recent months due to increases in profits for many of the banks, we have seen some banks now taking longer to approve short sales in in some cases demanding the seller to subsidize the sale by contributing money outside of escrow by virtue of a promissary note. We have seen this happen with some short sales of residential real estate in Danville, San Ramon, and Alamo, along with the surrounding east bay communities. In the specific cases that we have been involved with in Danville and San Ramon, either the seller stepped up or the buyer agreed to pay the promissary note. I have created some video blogs for short sales, and the short sale decision process which are still relevant but it is imperative, now more than ever, that there be open and frequent communication with the bank negotiator, the seller, and the buyer in order to head off any surprises. Also, not all banks are moving to this strong arm tactic. There are some banks who have actually streamlined their process so that the short sales can be transacted in a reasonable amount of time.
