Back to the short sale / foreclosure problem. OK. which is your property that has fallen in value to less than what you paid for it.  Now let’s just get on with it so you can get beyond it and begin rebuilding…hopefully in time to take advantage of the fire sale in the real estate market yourself.

Why won’t the banks be responsive? What is the d___ hold up? Well, now you get a perspective on the importance of your small piece of business to the larger corporate world of the bank and the bank investors. The smart people who get paid a lot of money to steer the bank towards profits are definitely NOT the ones who answer your phone calls and read you the script from their computer screens that all undecipherable babble designed to confuse and delay you in your goal to sell your property right now to a willing buyer who has come to you with an offer. You get to talk to folks who mean well, who might even be sympathetic with your problem. But they are not decision makers and you will never get a decision from them.

The banks profits depend on the balance of debts and assets. When you went in to the bank to submit a loan application (remember the application that you didn’t even sign until it was included in the inch thick pile of closing papers at escrow) you were treated well. You talked to a person who seemed to care and who really worked hard to make you look like a great opportunity on paper. The loan officer advised you on your income and your credit score. He hired a sympathetic appraiser to help make sure your dreams came true. But on the back end of that relationship was an analytic machine that plugged  your loan and your property into an impartial financial grid system that assigned a plus or minus for the bank’s main interest: asset or liability. Profit or potential loss. Your personal identity became a moot point, of no consequence to the bank.

These are harsh conclusions, but if you know anyone who is trying to sell their property via the short sale process, you will see the truth in them. My advice is to look outside the box for a way to accomplish your goal. See your property investment as a business decision. Evaluate and take stock of what you have and what you don’t have. Work every single angle: talk to another lender to see if you can refinance, call the bank and demand to speak to a supervisor (this most likely won’t work but you can still try), keep a precise diary of every thing you do and every call you make. Explore other avenues for solving your problem: do you really want to get rid of this property or are you just panicking in response to a collapsing market? Could you rent it out? There are some benefits here including tax incentives and income to help defray the costs. Could you restructure your loan….say, propose to the bank that you will assume a note for the amount of the second loan if you can sell the property for the amount on the first note. Your note would be either unsecured or secured by your other investments (think 401 K maybe or something else of value that you own) and propose paying the balance off in 5 years. What do you think?