The California Association of Realtors Wednesday delivered a public reprimand to the nation’s top mortgage lenders and servicers over their handling of short sales. The association charges the lenders with failing to respond to borrowers’ short-sale requests within a reasonable time frame, dragging their feet on processing files and miring incomplete files in excessive red tape, among other things.
“As public attention continues to be focused on the real estate industry in hopes of signs of a housing recovery, we trust you’ll agree that change in your short-sale process is critical,” said CAR President Beth Peerce in the letter. The association said the communiqué is a response to increasing difficulty among real estate agents in closing short sales, which it says will be a part of the California real estate landscape for years to come.
The letter outlines a series of recommendations for actions lenders should undertake to allow short sales to run more smoothly and aid in the housing market recovery.
“We believe banks, investors, homeowners and real estate professionals all have a common interest in conducting these transactions expeditiously and efficiently,” said Peerce in her communication to lenders. “The housing market recovery is in everyone’s best interests, and your urgent focus on these issues will help achieve that end.”
JP Morgan spokesman countered that the bank is now processing 5,000 short sales a month. “That is a significant amount,” the source tells HousingWire. “We know that short sales are important to the market and that is why we are doing so many.”
Citigroup also pointed out that it has had a specialized short sales group for a number of years. “In 2009 senior management increased our focus on potential short sales, recognizing that they may be the best solution for some borrowers,” said spokesman Mark Rodgers. “The unit employs short sales specialists who are able to expedite the short sales process.”