Banks stepping up to the plate on short sales

Banks appear to be slowly embracing the notion that short sales — the practice of accepting a price on a property that’s less than the loan against it — are the best of a set of unappealing choices. In the first six months of 2009, nationwide short sales nearly tripled to 40,000 from the year-ago period, according to data from the Office of Thrift Supervision and the Office of the Comptroller of the Currency. Still, there were 25 foreclosures in some stage of the legal process for every short sale. A Treasury Department plan announced Nov. 30 provides up to $2,000 in incentives for lenders and loan servicers who close short sales, part of the Obama administration’s efforts to stem the tide of foreclosures. “The single biggest problem was the lack of a vehicle or mechanism at most banks to handle short sales,” said Walter Molony, spokesperson for the National Association of Realtors. “You could say they were shortsighted in dealing with the problem.” Wells Fargo, Bank of America and JPMorgan Chase are among the major banks that have recently boosted their staff levels, developed computer software and stepped up marketing efforts to increase and speed up short sales. [Bloomberg via Miami Herald]