How much longer do I have to wait on a Short Sale?

Question

My husband and I bid on a short sale home in West Covina, Ca. We bid the asking prices which was $425,000. The bid was submitted the 30th of June, and we are still waiting to hear from the bank. Apparently the owner of the house had two loans on the house and we are currently waiting to hear from the second bank. The first bank replied within two weeks, but the second bank has not. Does anyone know, how much longer the process will be? It's been 2 month and now we are entering our 3rd. By the way, our agent opened escrow to avoid the listing agent accepting other offers. And the second bank just gave us an extention, but still has not given us the OKAY on our offer. What's going on.

Answer 1

Short sales are tough to get done in a timely manner as all want to be made as whole as possible. The second deed of trust may want to expire your contract so they can reopen bids. I hope not, but that may be the problem. Have your agent contact them as to when they will give the go ahead

Answer 2

I wish I could tell you.  The reality is that loss mitigation departments are overrun with short sales and foreclosures.   I talked with a loss mitigation person a few months ago that had 2,000 properties on their caseload.  This is very, very typical in a short sale.

If it has been this long, I am wondering if they are just going to let it foreclose rather than accept the short sale.  I hope not for your sake.

Kudos to you for having this much patience with the process.  Hopefully you will know something soon.  

Answer 3

You could be waiting anywhere from 3 days to 9 months. Seriously. There's no way to tell, and no way to speed the process up.

What's your agent say? There's nothing really your agent can do, either, except stay on top of the listing agent to make sure the listing agent is staying in regular, frequent contact with the lender.

You're very fortunate to have heard from the first lender so quickly. The second lender is more reluctant because that lender will lose most or all of its investment.

And it sounds as if your agent knows what he/she is doing. So, work with your agent. And have your agent work with the listing agent. Then: Be patient. Very patient.

Good luck.

Answer 4

The second bank is very likely trying to negotiate to get as much of their money back in this sale as they can.  They can't get it out of you and not likely out of the seller, so they are trying to negotiate something with the first bank.

If you walk away it does not really hurt their financial well being because they are very likely only getting cents on the dollar anyway.

Short sale always drag out very long and especially long when their is a second lien.

Answer 5

Short sales often take up to two or three months. The banks are being flooded with short sales, so it may take even longer. There is also a pickup in short sales fraud (e.g. The seller's brother's bid wins then returns the mortgage to the seller). Also note that the seller may be negotiating a new mortgage payment behind the scenes and just using your bid as a negotiation tool.