If I had a dollar for every short sale transaction that didn’t close on time, I’d be rich. Rich, I say. I’d be able to pay the mortgages of all of the folks having trouble making ends meet in San Diego County.
Every real estate caravan or meeting that I attend, I hear lenders and loan officers discussing the ever-changing guidelines for mortgage qualification. Mortgage lenders are adding additional reviews to their underwriting process. Employers are checked through a third-party verification system. Appraisals are sent to appraisal review. And the list goes on and on.
Because of all of these new hurdles on the road to obtaining a mortgage, it has become increasingly more difficult to close a transaction in thirty days.
However, the short sale lenders frequently only allow for thirty days on their short sale approval. I had three short sales that were supposed to close on Friday. On one, five days before the closing date, the underwriter requested an additional item in order to provide final loan approval. On another, the underwriter felt that a signature was too light and then requested further proof of the legitimate signature. On the third, the loan documents were generated with the incorrect purchase price.
In a traditional transaction, these issues can easily be conveyed to the seller and the seller’s agent who will be irritated but will understand. Short sale lenders also get pretty irritated when they hear the news. Some will tell you that they are closing the file and you have to start over and process the entire short sale all over again. Maybe it’s because they are mad because you have impacted their quota or their closings for the month. Or, maybe it’s because they are tired of the short sale transaction because it has taken so stinkin’ long to close. But, if I had a dollar for every short sale transaction that didn’t close on time, I’d offer to give the short sale negotiator fifty cents. Perhaps that would do the trick.