Houston short sales involve months of waiting
Houston short sales involve months of waiting and frustration
While short sales can save homeowners from foreclosure, they’re taking months to close and helping hold back the housing recovery, real estate agents and analysts say.
“This is tying up the whole real estate market,” said real estate agent Tim Verge, who has three short sales on the market for clients.
One listing is in a nearby section of Katy, Texas. It has been on the market almost a year. It’s also had several contracts, but the would-be buyers backed out because the bank holding the note took too long to respond to their offers, Verge said.
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“Sometimes the best offer is the person willing to stay in the fight,” he said.
Lenders have been taken by surprise by the housing crisis
The housing boom left some lenders unprepared for the financial tsunami of what was to come, said Mark Dotzour, chief economist at the Texas A&M Real Estate Center.
Indeed, there was so little financial stress when the real estate market was soaring that banks are now having trouble keeping up with the rising number of requests to modify loans or accept short sale offers.
“Institutions are understaffed and not efficient at processing the higher levels of volume we’re experiencing in Houston and around the country,” Dotzour said.
Bank of America’s volume of short sale requests on a national basis has doubled this year, said senior vice president Dave Sunlin in Dallas.
To expedite what has historically been a slow process, the bank has increased the employees who work on short sales — at least five times the number 18 months ago — and is launching a Web-based system to allow customers to exchange documents and check a sale’s progress.
Short sales, Sunlin said, can take so long because they often need input from several parties, like investors, second lienholders and mortgage insurance companies.
Still, Houston hasn’t been a hot spot for short sales compared to other markets that saw wild appreciation swings during the boom and bust.
“It’s been very regional at this point,” Sunlin said. “We haven’t necessarily seen big spikes the Houston area, but it’s starting to spread.” He declined to provide specific numbers.
While local agents said the number of short sale listings are on the rise, the Houston Association of Realtors hasn’t been tracking them long enough to generate any meaningful comparisons.
National short sales figures
Nationally, short sales nearly tripled to 40,000 in the first six months of 2009 compared with the same period a year earlier, according to a report from the Office of Thrift Supervision, the federal bank regulator, and the Office of the Comptroller of the Currency.
Following up on its loan modification program, the Treasury Department rolled out a plan Nov. 30 that provides financial incentives to borrowers, servicers and investors who use short sales to avoid foreclosures.
Short sale sellers typically have little to no equity in their homes and are behind on their loan payments.
When home prices were rising, borrowers who couldn’t afford their homes could sometimes sell them, pay off the mortgage and still have money left over, said Greg Hassell, a spokesman for Chase in Houston.
The bank has doubled its staff nationwide to handle the higher volume of short sale requests. Hassell couldn’t provide a local snapshot.
Banks take ‘so long’
Navigating the process with a large bank can be frustrating because of the lack of one-on-one contact, some agents said.
“We’re having huge delays with short sales,” said Katherine Vasquez of Re/Max Legends. “Probably the most frustrating aspect is we have buyers that want to close and the banks are taking so long to get to them that buyers are walking away.”
It takes more of an effort from the seller, too, who must provide past paycheck stubs, hardship letters and other financial documents before a lender will agree to a short sale.
Like foreclosures, these transactions can affect home values
Vasquez’s company had three short sale listings that each ended up in foreclosure because banks and buyers couldn’t agree on prices.
Each ended up selling or being listed for less than the previous short sale offers.
Indeed, just because an offer is made doesn’t mean a bank will accept it. Lenders will sometimes make counteroffers, which can slow the process, too.
Source: http://www.chron.com/disp/story.mpl/business/6778391.html
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