A Common Columbus Short Sale Myth: Banks Don't Approve Short Sales Because They Don't Want To Admit Their Losses

Columbus OH – I've heard the following myth from a lot of people. I've even seen this myth publicized in newspaper articles and quoted by so called financial experts.

Click here to discover how other sellers successfully did a short sale and avoided foreclosure. http://columbusohshortsaleadvisors.com/

Here is what people tell me.

"The banks can't afford to approve loan modifications because they don't want to take the losses on their books that fast.

Also, their investors may not approve the short sale, because they can't afford to write off too much loss at once. And the circle goes around and around", they say.

This common myth isn't true. Let me explain why. The odds are that your loan is not owned by your lender. For example, 80% of all Bank of America's loans are not owned by them.

The biggest holders are the Government Sponsored Enterprises, also called GSEs. The GSEs are Fannie Mae, Freddie Mac, and Ginnie Mae. These entities are accustomed to losses.

In fact, they have loan loss reserves on the books. The other entity that is accustomed to losses is FHA and VA. Between 65-70% of all US mortgages are owned or insured by the GSEs or FHA & VA.

Even small local banks don't own a large percentage of the loans they hold on the books. For example, another agent I know lives in a small town of 60,000 people.

There is a bank that dominates the lending market in the area. You would think this small bank was lending their own money. Not so. The majority of their loans are sold off within 12-18 months after they are written.

Here is the real reason that loan modifications and short sale are so tough. Remember, loan modifications and short sales will usually net the owner of the loan more money than a foreclosure.

The people who process the loan modifications and short sales won't lose any money if the home is foreclosed. Here is a classic example of this. An agent is negotiating an FHA short sale with Bank of America.

The short sale negotiator told him it would take her 2-3 weeks to review the offer and then submit it to FHA for final approval. How long was it going to take FHA to review the submitted file and respond?

She told the agent that FHA had a 72 hour turnaround from when she submits the file to her. It's pathetic. In this example, BOA isn't losing the money, FHA is losing it instead.

So, the person who is actually losing the money has a faster turnaround time on reviewing a short sale file. No, the system isn't working.

However, no one in Washington or at the big banks really seems to care. Thinking about a short sale?

I can help you short sale your property and get back on your feet. Send me an e-mail at robin.lemmons@kingthompson.com. I will contact you for a free consultation.

When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at 614-741-2495.

Discover how other sellers successfully completed a short sale and request a free consultation by clicking here. http://columbusohshortsaleadvisors.com/

Thinking about a loan modification? Our Columbus loan modification kit has the instructions you will need to get a loan modification approved with your bank. Click here to request a copy. http://columbusohshortsaleadvisors.com/

Thanks for reading this, Robin Lemmons.

Rick & Robin Lemmons is a Real Estate Team at Coldwell Banker King Thompson.

Phone: 614-741-2495

Email: robin.lemmons@kingthompson.com

A Zest For The Best

View My homes for sale at www.rickandrobin.com.

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Important Notice

Rick & Robin Lemmons, Coldwell Banker King Thompson, and the Stop Foreclosure Institute are not affiliated in any way, shape, or form with the government. Our services have not been reviewed or endorsed by the government or your lender. Most lenders willingly work with agents on short sales. Why?

Because most short sales are beneficial to a lender. If you accept our offer to help you on a short sale, your lender may not agree to a short sale or to modify your loan. We do offer a loan modification kit.

However, the likelihood of negotiating a modification is like everything else in life. It takes work and persistence to convince your lender to modify your loan. No matter what you or we do, your lender may not approve a loan modification.

We do not recommend that you stop paying your mortgage, because this will cause damage to your credit and could cause you to lose your home. Because we know avoiding foreclosure is so important to any homeowner, we recommend that you speak with the appropriate legal or tax advisor before making any decision.

This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing.

You have the option to reject a short sale or loan modification from your lender if it does not meet your approval. If you decide not to go thru with the short sale, then you do not have to pay us our fee. We normally make a real estate sales commission for helping you on a short sale.

The views expressed here are Robin's personal views and do not reflect the views of Coldwell Banker King Thompson.

This information on A Common Columbus Short Sale Myth: Banks Don't Approve Short Sales Because They Don't Want To Admit Their Losses is provided as a courtesy to our viewers to help them make informed decisions.