When Troy and Jane entered into a contract to purchase a short sale on March 24th, they had no idea that they would be still waiting for approval more than four months later. Calls to negotiators are met with full voicemail boxes, emails go unreturned and frustration looms. As Troy and Jane’s buyer’s agent, I am just as much in the dark as they. My SFR and CHS certifications are just as meaningless as my efforts to get in touch with the head loss mitigation, or any of his numerous minions. This is a story that should be a thing of the past. Upstaffing in loss mitigation departments, streamlined government short sale programs and the use of short sale platforms like Equator were all supposed to make the short sale process more bearable for buyers and sellers, and more profitable for major national lenders. Unfortunately, despite the implementation all these new methods and philosophies, time periods for approvals are no more predictable than they were last year.

Don’t get me wrong, the situation has improved. Most large lenders now have systems in place that have defined protocols and time periods that are at least rough guidelines for the approval process, but the end user investor still has the final say in whether or not a deal closes. What most borrowers don’t realize is that when they send their payment to Bank of America, Wells Fargo, Chase or any other company, they are sending the check to the institution that services their loan, not necessarily the company to whom they owe all that money. Virtually all lenders sold a large percentage of their loans to other financial institutions like Fannie Mae, Freddy Mac and other deep pocket investors, while still maintaining the servicing contracts for these loans. This means that, even after providing mountains of paperwork and waiting for weeks and months at a time, struggling homeowners may still have to wait even longer for the mythical “investor approval”.

Even with just the few dozen short sales that I am personally working on right now, I have some fantastic stories of both triumph and misery! One of the lenders with whom I am currently working bent over backwards to get a sale date postponed at the last minute to help my needy clients; however, despite having had everything they need to render a decision on the short sale approval, we haven’t heard from the negotiator in weeks! One of my negotiators specifically expressed that I had an approval on a file, and would be receiving it via fax in a few minutes. After trying, unsuccessfully, to get in touch with him for three weeks, I was contacted by a supervisor letting me know that he was no longer with the company and I would have a new short sale negotiator assigned to me within forty-eight hours. I am still waiting for the new one! On another property, I informed the seller that we would probably be looking at needing sixty to ninety days to get accepted terms from both lenders, and received written approval on both loans at day twenty-one!

I think the lesson that we can all take from this is that patience will ultimately be rewarded. The process is evolving. As the saying goes, “There are no perfect people, only perfect intentions.” Lenders are now working with borrowers and Realtors far more closely than they have in the past. However slowly, it appears that the short sale process is becoming more user friendly as time progresses. Although Realtors may have to wait for the next market cycle to see any kind of utopian short sale system, homeowners facing foreclosure are far less likely to have the bank pull the rug out from under them than ever before, and helping homeowners is what the whole “short sale thing” is all about.