In an effort to speed up the short sale process, some lenders are choosing to automate the way approvals are given. Bank of America is using a new system to automate the approvals of short sales, called Equator. It uses an Automatic Valuation Model (AVM) like Zillow.com to determine the value of the home, and any offer must match that value to be accepted. As anyone using Zillow knows, AVMs can be fairly inaccurate, often estimating a much higher value than it really is worth. Read the rest of this entry »
In the last two years, agents have told their buyers “short sales are to be avoided like the plague”. Some of the reasons included:
- The servicing agents were overwhelmed; it took weeks or months for a response.
- The lender was not realistic about values, asking for more than it was worth.
- Second leinholders refused to cooperate.
- Agent commissions were reduced, often at the last minute.
While some of these issues have improved, lenders still are illogical in their response to a short sale offer. One recent short sale of ours failed because the lender could not believe that home values had declined so much, and they would only be getting about 30% of the loan balance in net proceeds. Read the rest of this entry »
