Chicago IL – I’ve heard the following myth from a lot of people. Here’s what they tell me.
“The banks can’t afford to approve loan modifications because they don’t want to take the losses on their books that fast. Also, their investors may not approve the short sale, because they can’t afford to write off too much loss at once.
And the circle goes around and around”, they say. This common myth isn’t true. Here is why.
The odds are that your loan is not owned by your lender. For example, 80% of all Bank of America’s loans are not owned by them. The biggest holders are the Government Sponsored Enterprises, also called GSEs. The GSEs are Fannie Mae, Freddie Mac, and Ginnie Mae.
These entities are accustomed to losses. In fact, they have loan loss reserves on the books. The other entity that is accustomed to losses is FHA and VA. Between 65-70% of all US mortgages are owned or insure by the GSEs or FHA & VA.
Even small local banks don’t own a large percentage of the loans they hold on the books. For example, another agent I know lives in a small town of 60,000 people. There is a bank that dominates the lending market in the area.
You would think this small bank was lending their own money. Not so. The majority of their loans are sold off within 12-18 months after they are written.
Here is the real reason that loan modifications and short sale are so tough. Remember, loan modifications and short sales will usually net the owner of the loan more money than a foreclosure.
The people who process the loan modifications and short sales won’t lose any money if the home is foreclosed. Here is a classic example of this. An agent is negotiating an FHA short sale with Bank of America.
The short sale negotiator told him it would take her 2-3 weeks to review the offer and then submit it to FHA for final approval. How long was it going to take FHA to review the submitted file and respond?
She told the agent that that FHA had a 72 hour turnaround from when she submits the file to her. It’s pathetic. In this example, BOA isn’t losing the money, FHA is losing it instead. Yes, the system isn’t working, but no one in Washington or at the big banks really seems to care.
Thinking about a short sale? I can help you short sale your property and never pay the bank another penny. Send me an e-mail at email@example.com. I will contact you for a free consultation.
When we talk, I will explain how the process works in detail. If you prefer, then you can call me at (312) 953-6725.
Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.
Remember to visit my Chicago short sale blog frequently for great tips and information on short selling in Chicago www.Chciago-ShortSaleBlog.com
Thinking about a loan modification? Our Chicago Loan Modification Kit has the instructions you will need to get a loan modification approved with your lender. Click here to request a copy.
Thanks for reading this, Phil Buoscio.
Phil is a Real Estate Agent at Better Living Realty – Buoscio Brokerage, Inc..
Phone: (312) 953-6725. firstname.lastname@example.org.
View My homes for sale at www.BetterLivingRealty.com.
Phil Buoscio specializes in loan modifications and short sales in Chicago Illinois. Chicago Loan Modification Help. Chicago Short Sales. Chicago Short Sale Realtor. Chicagoland Short Sale Realtor. Chicago IL Short Sales. Chicago Realtor.
Phil Buoscio, is a broker with Better Living Realty he leads the sales team “Phil Buoscio Team” and specializes in short sales in Chicago Illinois. Chicago Loan Modification Help can be referred to you. We don’t do loan modifications ourselves but we work with those who do.
We know Chicago Short Sales. I am a Chicago Short Sale Realtor. Chicagoland Short Sale Realtor. Chicago IL Short Sales. Chicago Realtor. We do business in Pilsen. McKinley Park. Bridgeport. Wicker Park. West Town. Ukranian Village. Lincoln Park. Near North. River North. East Village. Logan Square. Uptown. Edison Park. Portage Park. Hermosa. Lincoln Park, South Loop, West Loop. Bronzeville. Hyde Park. Kenwood. Oak Park. Brookfield. Cicero. Berwyn. Evanston. LaGrange. LaGrange Park. Riverside. We sell condos, single family homes, lots, land, multi units, two flats, three flats, etc.
Copyright 2010 SFI Marketing Institute, LLC. All Rights Reserved. This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing. The views expressed here are Buoscio’s personal views and do not reflect the views of Better Living Realty – Buoscio Brokerage, Inc.. This information on Chicago Short Sales: A Common Myth About Banks and Short Sales is provided as a courtesy to our viewers to help them make informed decisions.