The rate of short sale completion is down and the time it takes for those completed is up. Blame it on a designed process that frustrates and stifles participants, on inadequate or incompetent staffing or on the simple decision that the banks see foreclosure as a viable option. This is occurring nationwide, especially in “hot” markets – and San Diego is a perfect example. Despite a stable to rising market, almost HALF of San Diego homeowners are underwater. Not all will head to foreclosure of course; some aren’t moving and will ride it out. Others however, may not have a choice. A short sale is often the first step after they realize they’re going to be in trouble if and when they move. Few can anticipate what to expect from the “we want to help you” lenders.
Just last month, the Huffington Post wrote an article about how former workers at Bank of America alleged that they were incentivized to push homes into foreclosure by lying to the homeowners about their current mortgage status, payments and documents for rewards:
“Six former Bank of America Corp employees have alleged that the bank deliberately denied eligible home owners loan modifications and lied to them about the status of their mortgage payments and documents. The bank allegedly used these tactics to shepherd homeowners into foreclosure, as well as in-house loan modifications. Both yielded the bank more profits than the government-sponsored Home Affordable Modification Program, according to documents recently filed as part of a lawsuit in Massachusetts federal court.The former employees, who worked at Bank of America centers throughout the United States, said the bank rewarded customer service representatives who foreclosed on homes with cash bonuses and gift cards to retail stores such as Target Corp and Bed Bath & Beyond Inc.”
I would hate to think that this is true, but we have definitely worked files where the bank continued to delay any action on a short sale file, even though they had the sufficient documentation to proceed accordingly. To hear about a major bank deliberately lying to homeowners for a reward is DISTURBING!