Survey finds short sales remain a broken system

The California Association of Realtors recently released the results of their Lender Satisfaction Survey which found mortgage lenders and servicers have shown little improvement in the short-sale procedures over the past six months. The survey showed more Realtors characterized closing short-sale transactions as either difficult or extremely difficult compared to last year.

According to the survey, 77 percent of Realtors found short sales to be difficult or extremely difficult, up from 70 percent in December 2010. Obstacles Realtors are facing in short-sale transactions include lenders' slow response to a short-sale package, poor communication with lender representatives and repeated requests for documentation. In fact, 15 percent of Realtors surveyed said lenders had foreclosed on properties before the short-sale had a chance to be completed.

CAR president Beth Peerce said mortgage lenders have failed to follow through on promises of improving the short-sale process, which accounts for a fifth of all transactions in California.

"Instead of helping struggling homeowners who need to sell and willing homebuyers who want to buy, lenders have created man-made roadblocks that have caused real estate gridlock and hindered a desperately needed housing recovery," Peerce said.

The California Association of Realtors recently created a website to get feedback from its members. The website reported 40 percent of Realtors found Wells Fargo to be the easiest lender to work with, while 23 percent preferred Bank of America.  

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