A comparison with previous recoveries is unflattering.
AUGUST 15, 2010: Arguably, short sales have become harder to complete over the past six weeks. Lenders who were (at least occasionally) granting waivers of deficiency judgments, have decided not to do so. But why?
The economic news of late has been dismal. Concern about America’s stumbling recovery has been rising. Americans are inundated with reports of a “lost generation” of young people who dropped out of the job market. And than there’s the infamous double-dip.
Maybe the lenders are taking a pause (after all, lenders are people too). Streamlining the short-sale process is really about two things: Understanding the needs of the servicer and investor, and looking at collateral and making a decision. Performing those two things becomes way more difficult in an economy like the economy of now.
Once the economy does something- anything, even if it goes from today’s bad to a double dip; or the economy moves past the probability of a double dip into stagflation; or people just flat out adjust; we expect that “certainty” should un-paralize the lenders. As a result, they will once again, begin reluctantly approving short sales.