According to Justin Rand, the senior vice president of loss mitigation at CitiMortgage, loan providers are stressing the process of streamlining the short sale process in hopes of avoiding foreclosure. In 2009, the short sale process took 120 days from start to finish. However, since brokers and borrowers have worked together to abridge it, the short sale process now only takes 83 days. At a panel for the REO Expo Conference held in Fort Worth, Texas, at the beginning of this week, Rand reported that for CitiMortgage borrowers, over 16% of loans in delinquency are currently in a short sale program. This figure has increased over 12% over the last two years.
Incentives on CitiMortgage loans are also now being offered to homeowners who are suffering from financial hardships and are in need of funding to complete the short sale process. This incentive would provide a set-upon amount that would be distributed to the seller when the short sale is completed. Many things factor into closing a short sale, but just like a loan modification, the key thing to a successful closing is getting all the needed documentation in order in a timely fashion. The Home Affordable Foreclosure Alternatives program helped this problem by decreasing the number of required documents. Rand says that back in 2009, it took up to 30 days to gather all the needed documentation. Now theyre down to less than ten days. He adds that "a lot of time, for [the] seriously delinquent loans, all we need is just a letter of authorization from the homeowner."
Bank of America operations executive David Sunlin says Bank of America completed more short sales than REOs every month for the last 1.5 years. Bank of Americas short sale department has grown to over 3,000 people from just 150. Every employee there conducts around 75 individual cases. Sunlin bragged, "Were past the point where were bumbling around losing files." While that remains to be seen, Rand argues that back in 2009, they started a "proactive approach," which includes combing through several local Multi-List Services and reaching out to agents and owners who were sinking in mortgage debt. Rand ends by declaring, "Were not going to turn anybody away if the short sale meets the net requirement were looking for."
