Bank Foot-Dragging?

"Short" Sales: Anything But

KARE 11's Rick Kupchella hosted a nice piece on tonight's 10 p.m. news about "short sales." (No video link here because I couldn't get it to work.)

A short sale occurs when the bank(s) agree to reduce the principal that they're owed so that the owner can take an offer without writing a check for the shortfall.

Kupchella interviewed an Edina agent who reported that the average response time to hear back on short sales, in his capacity as a Buyer's Rep, was 120 days. His success rate closing short sales? Forty percent.

In other words, 60% of the time, efforts at arranging a short sale fail, and the house presumably advances to foreclosure.

(Incidentally, those statistics echo my own -- thankfully -- limited experienced; I'm representing a Buyer now who's at 110 days without a formal response to his offer).

So what do the banks say?

None would appear on camera, or respond to requests for interviews. However, one bank cited a stale press release claiming that the average response time was less than a month.

Not based on what I've seen and heard . .

According to Kupchella, the normally cooperative Federal Reserve Bank of Minneapolis would only opine that banks had an obligation to employ enough staff to expeditiously handle such sales.