Working through a short sale of your home is an arduous process. Regardless of the efficiency of the team you work with, there are some challenges that will arise, and often the process itself can be emotionally and mentally draining.
Particularly in recent months, the short sale process has become more cumbersome and lengthy as lenders become overwhelmed with thousands of files, and the numbers of defaults continue to rise with no corresponding increase in staff in the lenders loss mitigation departments.
At some point the sheer volume of files entering the system creates massive delays and confusion as lenders struggle to keep up.
Here are a few of the things that anyone going through a short sale should expect may occur - with the caveat that while it isn’t exactly great news, it’s better to be prepared in advance and avoid feeling panic or getting too frustrated as the process moves forward:
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1. Many lenders will no longer postpone a trustee sale date until the property is within 72 hours of the sale date. This can leave to homeowners feeling hopeless or that their home is bound to go to foreclosure before the short sale is accomplished. The answer is to stay calm and realize that the files are so backlogged that the lenders only have time to deal with the files that are at the point of going to foreclosure first - and they don’t seem to be catching up. Be prepared to weather the uncertainty, and to make calls to the lender when needed to assert your desire for the short sale as the solution to your problem.
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2. The days of 30 day short sales have come and gone - while in some rare cases these quick turn around short sales do still exist, they are the exception and not the rule any longer. In most cases short sales are taking longer than ever, and so you will need to be patient. It’s very difficult to stay calm and relaxed as you see the Trustee Sale Date approaching, but remember that so long as there are active negotiators working on the file who are aware of the timelines, things are generally under control. (Even if it really doesn’t feel that way on the day before a sale date when the postponement still has not been registered to the record or the file.)
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3. You may continue to receive calls from the lender - or from the lender’s collections department. Some lenders note a file as in the process of short sale and stop the calls, but many do not. Many lenders have crossed communications within their own systems and collections departments continue to call and attempt to work out a payment plan from the homeowner even as the short sale is being negotiated. The best solution for the homeowner is to be prepared for these calls and to continue to inform any department of the lender which continues to call that indeed they are in the process of a short sale and to please note the file accordingly. It may be necessary to give the lender the name of the negotiator working on your file, and their contact information and to request that they communicate with the negotiator of the short sale if at all possible.
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4. Be prepared for unexpected delays and mis-communications - particularly as the process is getting underway. Most lenders have a visual database system for their various departments. This means that when documents are submitted to them there is a process which can take from seven to ten business days before those files are visible to all areas of the lending institution. During this period, many times various departments will contact the homeowner in attempts to resolve the open file status of the loan. The best way to handle this is to let them know that the short sale package has been submitted and that while it may not yet be showing up in the system, a short sale process has been begun. Again, always ask that the representative you are speaking with makes a note to the file containing the information you provide. In extreme cases you may need to request that the representative email you a copy of the notes they are submitting to the file or at the very least read the notes back to you to be sure they have indeed put the information into the file.
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5. Remember that the ultimate objective of the short sale is the sale of the property, and keep in mind that at some point in the process it will be necessary for you to prepare to move. While this can be extremely frustrating when it is so unclear as to when that will actually happen, it is important to realize that ultimately it will happen.
Moving is a stressful event in and of itself, never mind when it is surrounded by uncertainty as to exactly when one should move. Try to prepare a little bit at a time as the process begins and to do those things which can be done without disrupting your day to day living needs. Pack up the attic, the basement or non essential items first and get them ready so that when the timeline becomes clear you have the non essentials already dealt with and you have only the real items you need on a daily basis left to pack.
It is important to realize that in today’s strained and over extended mortgage melt down lenders are more concerned with the property being vacant and subject to vandalism and/or squatters and other issues - so it’s best if you can stand it to stay put until the negotiator gives you the green light that the short sale is close to an acceptance. Moving out early can jeopardize the process in some cases as the lender becomes more aggressive in their sense of urgency to protect the property from deterioration due to vandals or other issues that arise when a property is vacant. Have a conversation with your agent about what is best and stay in communication so that you are not caught off guard or find that your plans are pre-emptive when it comes to making your move.
All in all, moving through the process of proactively addressing a pending foreclosure, whether through a short sale, a loan modification or other solutions is highly stressful and taxing. Try to be patient and gentle with yourself during these difficult times and remember that what you are doing is in your own best interest - Don’t be fooled into thinking tha the ‘do nothing’ or ’simply walk away’ approach can really serve your best interest. It is in your best interest to work to resolve the situation so that there are no lingering consequences to your credit or your pocketbook. When there is no resolution, the lenders may be able to pursue you for further redress, and certainly that is not in your best interest. Be sure to review the Foreclosure Resources and Facts section of this web site to arm yourself with as much knowledge as possible before you begin your journey to the other side of the situation.
Above all, remember that while at times it may seem that the problem will go on forever, it will not. There will come a day when it will be behind you and you will be able to move on to better circumstances and choices. And don’t forget that the people working with you are there for you - when you are unclear or uncertain they should be supportive and willing to take the time to address all your concerns. Whether or not they can resolve them all in that moment, they should be willing to hear you out and do their best to give you the information you need as you go. If they fail to communicate, or do not keep you informed, let them know that you expect better communication and be clear about what it is you want from them.
