Check out some of the nutty reasons why mortgage lenders make short sales take so long.
In many situations, the mortgage lender or servicer cannot get out of their own way. They create inane reasons why they cannot make a decision on whether to approve a short sale. Below are just some of the reasons we have seen.
- The sale contract had the buyer’s name misspelled in one section, and the servicer refused to make a decision until a fully corrected contract was issued. The contract had the correct spelling of the buyer’s name elsewhere, and the buyer’s signature was authentic, but the servicer insisted upon having no misspellings anywhere.
- The IRS tax return was not signed by the seller, and the lender refused to consider a short sale until the seller signed the tax return. Note that the seller’s tax preparer had submitted the tax return to the IRS on the seller’s behalf. The IRS considered the tax return to be valid with the tax preparer’s signature. However, the lender insisted upon having the seller sign the tax return even though it was good enough for the IRS.
- The bank negotiator went on a three week vacation, and no one else in the company would cover for him in his absence.
- The sale contract did not have the seller’s middle initial, and the servicer refused to render a decision until the middle initial was added. Even though the contract was legally sufficient in that state, it was not good enough for the servicer.
Check back in for Part II of this series.