Loan Modification Track Can Lengthen Short Sale Process...

Keeping people in their homes is critical. Banks that can modify loans should, but the banks are too focused on loan modifications. So much so that if the homeowner mentions loan modification in a conversation with the bank they are put on a loan modification track that is almost impossible to alter. Okay I may be exaggerating a little bit, but the banks need to quickly determine if a homeowner can afford their home or not. If not, the banks need to be upfront and let the homeowner know their other options. If the homeowner determines that a short sale is their best, or only, alternative, then the banks need to put them on the short sale path. Currently the banks keep the homeowners on the loan modification path for weeks and months even after a homeowner has clearly indicated that they would like to move forward with a short sale instead.

Word to the wise, homeowners need to decide what they want to do, loan modification or short sale before entering into a purchase and sale agreement. Ideally, it is best if the homeowner decides before the property is listed. Unfortunately banks can't consider a short sale and a loan modification simultaneously. Homeowners should make their decision to sell or hold up front.