So you made an offer on a short sale home which the seller accepted. Now you are waiting for the bank to accept your offer and approve the short sale.
Unfortunately, even after all these years, the short sale process is still a mystery to many. And the most confusing part is usually the role the bank plays in approving a short sale. The most common question and frustration is: “Why does it take so long?”
Just to get the bank to receive all the documentation it needs, and say “okay” to the short sale is inherently lengthy. The most complicated piece however, is actually after the initial approval by the lender. Often, there may be a list of investors who own ‘pieces’ of the mortgage loan, and all these investors will need to approve the short sale agreement.
“What?!” you say. I’ll bet you thought that there was only one lender… well, often that’s not the case.
Throughout the many years of growth in the real estate industry, an investment tool was created called Residential Mortgage Backed Securities. Mortgage loans were packaged together and sold on Wall Street as an investment vehicle making millions of dollars for many.
Today, the downside is when a securitized property is sold for less that the amount owed to the investors, i.e., a short sale. Each ‘investor’ must sign-off on the deal. That takes time and can be part of the reason why so many short sales fail to close.