Asking for your opinions
I am beginning to think I am seeing a pattern or becoming paranoid. My last 4 short sale approvals that came in last week (different lenders) all were asking for more than market value of the properties. They all said basically "this is what we want and don't bring us an offer lower"...end of conversation. I looked at comps of each of these and can not see how they would appraise out yet negotiator/investor is not being realistic.
Is there something going on behind the scenes that would make it more profitable for the lenders to let these properties go to foreclosure instead of accepting a reasonable short sale price? Any thoughts?
Replies to This Discussion
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Permalink Reply by Jeff Payne on
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I think that it could be due to lender placed MI, the lender knows that the MI company is going to share in their loss so maybe that is what they are looking at. Good question.
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Permalink Reply by O. Kheir on
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Actually, the lenders should not want to go through the foreclosure process, it is messy, expensive, and not a "win-win." In my area. Remember, banks are sending out appraisers who may not understand your particular market.
For example, I had a lender send out an appraiser who, when he saw the ocean said that the condo was "real nice." So, I had to ask, where are you from, and he turned out to have been sent in from inland to do an oceanfront appraisal. We contested the appraisal, had the buyer pay for the second one, which was substantially different.
Growing up, I always heard "consider the source" - and this is especially true in REO, short sale and distressed valuations. It never hurts to ask for another lender appraisal, sometimes, you can show that their first attempt was bogus.
As far as a pattern, I have not experienced the lenders asking for more ... there are many factors. Just curious, did these (4) short sales have a second mortgage attached? Sometimes, that may make the difference....
O.
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Permalink Reply by Jim Schneider on
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Sounds like you're dealing with the servicer, not the investor. The servicer is the point of contact, they send out the bpo agents (usually through a third party company), take in the short sale packet, staff the short sale department, but they don't own the loan (in most cases). Their incentive is to string this along as they receive more servicing fees. If anything, they prefer foreclosure because they can pass those costs along to the investor, whereas they actually have to pay to staff the short sale department.
The investor can be your saving grace, if the deal makes financial sense (they couldn't get more as an REO) and there's no MI involved, which as Jeff pointed out can change the financial incentive for the investor (who may make more as a foreclosure if MI is not willing to contribut).
Go to the investor (research in on MERS, Fannie/Freddie Loan Look-up, or file a QWR) if the deal makes sense but the servicer is not doing anything. If it's MI, find out what company and make your case there.
Good Luck
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