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A Common Northeast OH Short Sale Myth: Banks Can't Write Off Too Much Loss At Once


Northeast OH – We at the Stop Foreclosure Institute receive emails all the time that go something like this “The Bank’s Short Sale Problems are not that simple.

A bank can’t afford to write off too much loss at once. Also, their investors may not approve the short sale, because they can’t afford to write off too much loss at once either. And the circle goes on. Thank you, Amy

Get my Free, Step By Step Loan Modification Guide by clicking here.

Here is why this flawed assumption is incorrect. Most of the large, national banks do not own the mortgages they handle.

As an example, Bank of America does not own 80% of the mortgages they service. The biggest holders are the GSEs: Fannie Mae, Freddie Mac, and Ginnie Mae.

These entities are accustomed to losses. The other entity that’s set up well and accustomed to losses is FHA.

Most of the remaining loans are owned by Wall Street Firms, Pension Funds, and other professional investors. Most of the loans owned by them have already been written down in value dramatically.

In a few, isolated instances, the “We don’t want to write off losses to fast because it will hurt this quarter’s earnings” thing applies. First, off any bank CEO that plays this game should be fired.

It’s illegal because of accounting rules. Not writing off losses that you know about could be considered insider trading by many.

Besides, when you push the loss on non-performing loans to the future, the losses are bigger in most cases. Any prudent person would agree that making losses bigger by pushing them to the future is bad business.

The bigger problem is that the lenders don’t have enough staff to process the files. They need short sale negotiators to submit files to the owners of the loans.

As an example, on a recent FHA short sale, the negotiator told us it would take her 2-3 weeks to review the offer and then submit it to FHA.

However, she did tell me that FHA only has a 72 hour turnaround from when she submits the file to them. That is pathetic.

Here is why the lender doesn’t have any incentive to hire on more staff. On that file, the lender isn’t losing the money, FHA is losing it.

Therefore why should the lender spend money to hire on more staff? There is no incentive to do so.

Thinking about a loan modification?Our A Common Northeast OH loan modification kit will show you how to reduce your mortgage payment, keep your home, and get back on your feet. Send me an e-mail at to request a Free Copy. Or, click here to request a copy.

Thinking about a short sale? I can help you short sale your property so you can move on with your life. Send me an e-mail at I will contact you for a free consultation.

When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (440) 348-5500

Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Andy Morris specializes in loan modification assistance and short sales in Northeast OH Ohio. Northeast OH Loan Modification Help, Northeast OH Short Sales, Northeast OH Short Sale Realtor, Rocky River Short Sales. Rocky River Loan Modification Help, Rocky River Short Sale Realtor, Bay Village Loan Modification Help, Bay Village Short Sales, Bay Village Short Sale Realtor. Avon OH Loan Modification Help. Avon OH Short Sales. Avon OH Short Sale Realtor. Avon Lake Loan Modification Help, Avon Lake Short Sales, Avon Lake Short Sale Realtor. North Ridgeville Loan Modification Help. North Ridgeville Short Sales, North Ridgeville Short Sale Realtor. Sheffield Lake Loan Modification Help, Sheffield Lake Short Sales, Sheffield Lake Short Sale Realtor. Columbia Station Loan Modification Help, Columbia Station Short Sales, Columbia Station Short Sale Realtor. Grafton Loan Modification Help, Grafton Short Sales, Grafton Short Sale Realtor. Northeast OH Short Sales. Northeast OH Realtor.

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