In December of 2009, Bank of America starting using a company called Equator for processing its short sales. Today, there are said to be 17 lenders using Equator to process their short sales including GMAC and as of last month, Wells Fargo. You may ask what this means to you.
According to Calculated Risk, the number of foreclosures and short sales for the last three years:
Year Foreclosures Short Sales
2008 914,000 95,000
2009 949,000 263,000
2010 1,070,000 375,000
2011 est. 1,500,000 500,000 from what I read in blogs I subscribe to
2012 est 2,000,000 ? this is the worst figure I have seen
In my experiences and according to approximately 15 other agents in my office who have done hundreds of short sales, since Bank of America starting using Equarter their time to process and complete the sale has gone from several months down to often 30 – 45 days. This is an amazing improvement for the buyers and sellers who have to deal with the emotional stress of trying to buy or sale a home during these financially stressful times. Granted, there are still many horror stories out there where it still is taking lenders three months or longer to even respond to a buyer’s offer. The longest I have heard of is one year.
You would think this wouldn’t happen but I will give you one example of a condo in the city of Sonoma where I had a buyer make three all cash offers listed at $159,000. He initially offered full listing price, then $165,000 and finally $170,000 all 15 months ago. The reason for three offers, there were other offers which came in higher and my buyer really wanted the property. After the $170,000 offer won out as the highest, the listing agent submitted it to the lender. After four months without hearing anything from the lender, my buyer gave up and withdrew his offer. The property just closed escrow for $150,000, go figure.
You would think anything that improves the current real estate distressed sales situation is great and I agree Equator has done a good job at helping with short sales. But the light at the end of the tunnel is still a bit too far away to see clearly yet. Everything I read predicts this current debacle will last well into 2012. Hopefully this will be the end of this and a similar situation will never again rear its ugly head. However, I continually read how many delinquent FHA loans are out there and too often read comments that this will be the next housing crisis. I hope not
Here are a few quotes from the Equator newsletter, Agent News/Spring 2011, to ponder on:
Today 1 in every 370 homes in these former “hot” markets such as California, Arizona, Nevada and Florida has recently received a foreclosure notice.
With more than 4.3 million loans that are 90 days or more deleinquent or in foreclosure (information provided by LPS Applied Analytics), Agents need to be prepared for the onslaught of activity coming in 2011.
With the current average of 507 days delinquent for loans in foreclosure, up 125 days from a year ago, loss severity will increase before it improves.
An estimated 1.5 million foreclosures are expected for 2011.