Comments on: Bank Loses $62,000 due to Stubbornness. http://www.robinsrendition.com/short-sales/bank-loses-62000-due-to-stubbornness/ Thu, 02 Apr 2009 00:58:54 -0500 http://wordpress.org/?v=2.8.1 hourly 1 By: Robin Willis - Tucson's Expert Agent http://www.robinsrendition.com/short-sales/bank-loses-62000-due-to-stubbornness/comment-page-1/#comment-471 Robin Willis - Tucson's Expert Agent Thu, 02 Apr 2009 00:58:54 +0000 http://www.robinsrendition.com/?p=47#comment-471 Interesting thought, Lisa. I wish that we could give the banks credit for being so smart. LOL Oftentimes the bank does have insurance on the debt, but the insurance will also pay out on a short sale loss. Keep in mind that the insurance only covers a portion (top 10% or 20% of the loan, for example) so many times by foreclosing they incur liability greater than that and end up losing more. Sadly, the reason that many banks can't make sound decisions is that there are too many decision makers. They have the manager at the bank, the investor, and often, the insurance company. If these two or three don't okay the sale then it is rejected and everybody loses! Interesting thought, Lisa. I wish that we could give the banks credit for being so smart. LOL Oftentimes the bank does have insurance on the debt, but the insurance will also pay out on a short sale loss. Keep in mind that the insurance only covers a portion (top 10% or 20% of the loan, for example) so many times by foreclosing they incur liability greater than that and end up losing more.

Sadly, the reason that many banks can’t make sound decisions is that there are too many decision makers. They have the manager at the bank, the investor, and often, the insurance company. If these two or three don’t okay the sale then it is rejected and everybody loses!

]]> By: Lisa Wright http://www.robinsrendition.com/short-sales/bank-loses-62000-due-to-stubbornness/comment-page-1/#comment-466 Lisa Wright Wed, 01 Apr 2009 21:25:49 +0000 http://www.robinsrendition.com/?p=47#comment-466 I have a question, I have been watching this happen since I started looking at Tucson real estate 2 years ago. It would seem that a short sale is in the interest of the bank yet, so often they let perfectly good offers go.... To me this is a puzzle. Banks are in business to make money and it would seem with these kinds of transactions that they are loosing money so the only thing that I can figure out is that they are still making money on the transaction somehow. My thought is that they have insurance on the debt... the insurance pays out and then they sell the house win, win for them. What do you think? I have a question, I have been watching this happen since I started looking at Tucson real estate 2 years ago. It would seem that a short sale is in the interest of the bank yet, so often they let perfectly good offers go…. To me this is a puzzle.

Banks are in business to make money and it would seem with these kinds of transactions that they are loosing money so the only thing that I can figure out is that they are still making money on the transaction somehow.

My thought is that they have insurance on the debt… the insurance pays out and then they sell the house win, win for them. What do you think?

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