Short Sale Stall - Western PA

**m31uk3** · 01-30-2010, 04:22 PM

Hello Forum,

I am a buyer currently in the processes of a short sale for a home in the western PA region.

I made my initial offer on the property back in September and finally heard something from the Sellers Bank at the end of December.

We (My Agent and I) agreed to the terms verbally and were told that the Sellers Bank would ready the agreement and request the needed form from the PMI Company (Private Mortgage Insurance).

It is my understanding that the previous owner (Seller) did not put 20% down on the property and therefore was required to carry PMI.Interestingly enough it seems that the only entity who is able speak with the PMI company is the Seller's Bank, whom only speak with the Seller's Agent and the Seller, whom then speak to my Agent whom finally relays the details to me.

Now that Feburary is upon us, the probability of closing prior to the First Time Home Buyer's Credit deadline is decreasing. My Angent tells me that all parties are simply waiting on the PMI company who are at the moment drastically overwehlmed with filings and ours is simply somewhere in the pile.

As the days progress the frustration from inaction increases. I find my self continuously asking many questions:

* Why isn't the bank more motivated to close? Doesn't holding the property cost them at minimum the accumulating interest on the value of the defaulted loans?
* Why can't the PMI company be reasoned with? If I'm a strong, clean, pre-qualified buyer with a verbal confirmation from the Seller's Bank and the Seller wouldn't it be logical to expedite the claim?
* The property is still active in MLS, however according to the Seller's Bank submitting any new offers would start the entire short sale process over. Therefore theyverbally assure us that our offer is the only one on the table. Is it naive for me to trust them?
* Seeing as our only apparent contact is the Seller's Agent are there any avenues of action other than optimistically waiting?

If anyone could offer advise on my situation I'd greatly appreciate it!

Best,
m31uk3

**Greg** · 01-31-2010, 04:23 AM

I hope you are still looking for other properties because short sales are hit or miss. It might close but most likely it won't.
http://hubpages.com/hub/outer-banks-short-sales

**m31uk3** · 01-31-2010, 05:38 PM

Hi Greg,

Thanks for the link however I don't think your advice applies to my specific situation.

As mentioned above we've already got a verbal confirmation from the Seller's Bank and are now supposedly waiting for the PMI Company. Furthermore this property has been vacant since my offer date.

**Greg** · 02-01-2010, 05:10 AM

Verbal doesn't mean squat.

10% of the short sales in our MLS that have a written "contract" and the buyers have paid for the appraisal and home inspection still end up in foreclosure leaving the buyer with nothing.

If it was in the best interest of the banks and the PMI companies to close a short sale you would already be living in your house. Unfortunately, the tax breaks for these entities favors foreclosure.

**Dave Reynolds** · 09-07-2011, 06:04 PM

Unfortunately, due to our current real estate crisis many mortgage lenders are in over their heads when it comes to foreclosure prevention. Millions of households are underwater with their mortgage and many are seeking assistance in order to avoid losing their home. With that being said the bank is very motivated to close but may not have the necessary resources available to take the necessary steps to prepare the file for closing.

In this case it sounds like the PMI company is a separate entity of the mortgage company which would explain why things are taking so long. I would recommend that you speak with the Seller’s Agent and let them know that you are prepared to walk away from the deal if you do not receive an amended offer from the bank. Once received this amended offer would require the seller’s agent to update the status of the property in MLS to Contract which protects your right to purchase the home.

A second option is to submit an updated offer to the bank that reflects the verbal offer that was discussed by the bank. By law the agent must submit the offer to the bank. Again this will help protect your right to purchase while the lender prepares the file for closing.

If either of these options does nothing to speed up the process or protect your right to purchase the home, I would recommend that you continue your real estate search.