Given the number of blogs on the difficulties agents experience on short sales, I thought I’d take another shot at a canard that banks are now using to justify more delays, and that is the following:
“The investor is reviewing the file.”
This is typically followed by 60 days of nothing.
Now, I don’t argue that the investor is reviewing the file, I simply question the wisdom of the investor reviewing one file at a time.
Let’s go back to mortgage 101: when a mortgage application is underwritten, it is reviewed by an underwriter to ensure that it conforms to the standards of the investor, which for example, could be Fannie Mae or Freddie Mac. Fannie and Freddie then buy these loans by the thousands in bundles. If Fannie Mae and Freddie Mac manually reviewed every new mortgage application one at a time we’d just be getting around to closing all the contracts written in 2007. It is utterly absurd for them to do so. Commerce would cease.