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Short sales stymied by complications, delays

Emmet Pierce signonsandiego.com
A home on Cottonwood Avenue in Santee was trashed by vandals while it sat vacant for months, awaiting lender approval for a short sale. (Laura Embry / Union-Tribune) -

A home on Cottonwood Avenue in Santee was trashed by vandals while it sat vacant for months, awaiting lender approval for a short sale. (Laura Embry / Union-Tribune) -


With an estimated 20 percent of U.S. mortgage holders owing more on their loans than their homes are worth, short sales often represent the best chance for distressed borrowers to avoid foreclosure.



The problem is that many real estate professionals say it's growing increasingly difficult to complete transactions in which lenders allow sellers to accept less for the home than the outstanding debt. Many pending short sales fall through as buyers grow tired of waiting for loan servicers to complete a lengthy approval process.

“There is an awful lot of paperwork and moving parts,” said Rick Sharga, vice president of the RealtyTrac real estate research firm. “The loan servicers are overwhelmed. There is a huge, huge bottleneck. It's not at all uncommon to hear a Realtor talk about making an offer on a short-sale home and not hearing back for three months.”


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