It's Short Sale Time........cont'd part 3......

Push-back not a problem..........



Favorable figures and bottom-line benefits aside, lenders have traditionally been loath to engage in short sales, not wanting to take a financial hit on the front end without knowing what the property is worth. Servicers, too, have faced myriad stumbling blocks. First, there is the complexity of a three-party---or more---negotiation, with buyer-seller-lender/servicer and usually additional or even multiple subordinate lien holders beyond the first one jockeying for position and a piece of the profit pie. There is more paperwork, a longer stream of necessary documentation, and a more involved review process--a slap in the face for clock-crunched loss-mitigation departments. There is the protracted time frame, as short sales have traditionally taken much longer to carry out than regular sales, along with the difficulties of bringing the sale to closing--a balky second-or third -lien holder can put the kibosh on forgiving its portion of the loan, effectively negating the deal. And at the end of this process, the distressed property must be sold as-is. All these difficulties, in addition to asking lenders to accept less than what they're owed, historically have made short sales less than appealing to servicers. But thanks to recently enacted federal initiatives that arm servicers with the tools they need to minimize the logistical hurdles, servicers finally are adding short sales to their residential-mortgage repertoire.