Trapped Like Rats

by Doug Love

Start to finish, a short sale is like a maze for rats in a science lab experiment. Bank asset managers (like scientists), release buyers (like rats), into the maze. Unsportsmanlike, the bank-scientists constantly change routes through the maze, adding and moving road blocks, redirecting traffic at will. The buyer-rats, even ones possessing a keen sense of direction and pattern-memory, are rendered helpless. They often lose all will-power, giving up entirely. Every so often, a bank-scientist lifts a gate here, moves a barricade there, allowing a successful run-through. A lucky buyer-rat thinks, “Well, I don’t know how I got here, but the cheese is mine. What a long strange trip it’s been.”

Protest against the banks is underway. Citing cruel and inhumane tactics, calling them out on their unethical short sale practices, is the California Association of Realtors (C.A.R). C.A.R. recently sent letters to the heads of the nation’s largest banks – JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo.

In the letters, C.A.R. made the following demands:

  • Provide clear directions and realistic time frames for short sale approval.
  • Provide short sale approval requirements up front.
  • Disclose whether a loan is owned by the bank, and if not, who has authority for final approval.
  • Approve the short sale and acceptable price prior to a property being listed for sale.
  • Review and respond to a short sale request within 30 days.
  • If a short sale is rejected, be explicit as to why and how it can be corrected.
  • Don’t restart the entire process simply because something is missing from a file.
  • Have a live person available to provide information about a file’s status and shortcomings, and to assist in problem-solving.
  • Increase the speed of processing files. Too often, months elapse and buyers lose interest.
  • When a short sale is approved, be explicit that there will be no pursuit for payment on the forgiven loan amount, as required by law.

C.A.R. says they will remain vigilant in the arena of short sales and issue updates on their progress.

Start to finish, short sale buyers, like all buyers, deserve to be given a fair shot, not tossed and lost, like rats in a maze.