Lenders Holding Out On Short Sales
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2008-05-07 — dailybusinessreview.com
“Banks are frozen like a deer in the headlights,” said Richard Green, a real estate lawyer and broker with Weichert Realtors–Green & Associates in Fort Lauderdale. “They are inundated with cases and take weeks and months to make a decision. Often, buyers get disgusted and withdraw their offers.”
This is an important story. KEY EXCERPT (emphasis added):
Two subsequent offers for $750,000 last year and $650,000 four months ago were rejected because the lender wanted close to $700,000 for the property, Fernandez said. GMAC took the property back in March with Pospieszalski owing $989,608 in principal, interest and other fees.
Today, GMAC is marketing the three-bedroom home on Cellini Street for $609,900 — more than $250,000 less than the original short sale offer.
“What is wrong with these people?” Fernandez asked. “Are they waiting for the federal government to bail them out? Why aren’t they doing short sales?”
A-la the Dodd $300B FHA bill, they probably are. "Forcing" the lenders to take a 10% haircut, with the government backing the rest, is a much sweeter deal than directly facing the realities of the market.