Lender Satisfaction Survey

Short Sale Breakout

Final Results, 07-25-12

Objective and MethodologyObjective:

To gauge members’ recent experiences and satisfaction level with lenders in order to address the ongoing challenges with short sales, foreclosures, REO’s and traditional sales with financing and approving real estate transactions.

Methodology: An online survey was delivered via email and 1405

REALTORS® responded to the survey. There were 612 survey respondents where the most recent

transaction with the lender was a short sale. The survey was active in June.

Lender Performance Index

2010 2011 20120

5

10

15

20

25

1617

23

SOURCE: California Association of REALTORS®

Majority of REALTORS® in California Dealt with Bank of America in Most Recent Short Sale Transaction

Other ; 14%

Citi Bank; 4%

JP Morgan Chase; 14%

Wells Fargo; 18%

Bank of America; 50%

Please indicate which lender/servicer you dealt with in your most recent transaction.

Difficulty in Closing Improving

Please rate the level of ease or difficulty you had in closing this transaction. 5 is extremely difficult, 1 is extremely easy.

Extremely Easy

Extremely Difficult

N=495

5

4

3

2

1

0% 10% 20% 30% 40% 50% 60%

34%

30%

17%

12%

7%

56%

21%

12%

7%

4%

20112012

Levels of Satisfaction Slightly Higher than 2011

The timeliness of responses to your inquiries

Knowledge/professionalism of the representative you worked with

Length of time to obtain approval/disapproval of the short sale transaction

Expectations of financial contrivuations from the seller at or after closing

Your overall satisfaction with this lender

1 2 3 4 5

2.5

2.9

2.2

3.0

2.5

2.1

2.4

1.8

2.4

1.9

20112012

With respect to your most recent transaction, please rate your satisfaction level with the lender/servicer in the following categories.

Very SatisfiedVery Dissatisfied

Overall Satisfaction With Lender During Short Sale Better Than a Year Ago

Not at all Sat-isfied Not Satisfied

NeutralSatisfied

Extremely Satisfied

0%

10%

20%

30%

40%

50%

60%

2012

2011

36%

23%

14% 16%12%

54%

21%

9%9%

7%

2012 2011

With respect to your most recent transaction, please rate your satisfaction level with the lender/servicer - Your overall satisfaction with this lender

Communications with Lenders Improving…

On average, what was the actual time it required for the lender's representative to return any form of communication to you?

n=510

More than 5 business days

Within 5 business days

Within 4 business days

Within 3 business days

Within 2 business days

Within 1 business day

Within 1 Hour

Instantly

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

30.4%

7.3%

4.9%

14.3%

16.1%

19.4%

6.5%

1.2%

43.0%

5.2%

4.6%

12.8%

14.7%

14.5%

4.1%

1.1%

20112012

…But Communication Problems with Lender Remain Obstacles to the

Transaction

What were the obstacles you faced with this transaction? (Check all that apply)

Other

Problems qualifying the buyer

Lender foreclosed before the transaction completed

Seller in the short sale transaction not responsive

Problem with the appraisal

Problem with the second lien holder(s) in the short sale

Buyer backed out of the transaction/Long negotiations

Repeated requests for documentation

Poor communications with lender representative

Lender's response time to the short sale package

0% 10% 20% 30% 40% 50% 60% 70%17%

4%

8%

11%

12%

23%

32%

50%

55%

67%

2011 2012

The Majority of REALTORS® Have Worked with Their Lender/Servicer in the Past 5 Years

Have not worked with

Have worked with

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

14%

86%

Have you worked with this lender/servicer in the past 5 years? N=611

Not Much Improvement From Previous Transactions With Same Lender

Worsened

Unchanged

Improved

0% 10% 20% 30% 40% 50% 60% 70%

32%

35%

33%

Since your last transaction with this lender/servicer, has your experience during your most recent transaction improved, unchanged, or worsened since your previous transaction with the same lender/servicer?

N=517

More REALTORS® Likely to Refer Lender to Future Buyers than in 2011

How likely are you to refer buyers to this lender for financing on a future home purchase?

Unsure

Not at all likely

Not likely

Likely

Very likely

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

8%

42%

23%

16%

11%

7%

60%

18%

7%

7%

2011 2012

n=557

Overall, how did working with this lender make you feel?

N=492

Very Unhappy Unhappy Neutral Happy Very Happy0%5%

10%15%20%25%30%35%40%45%50%

44%

21%

11%15%

8%

Dual Tracking an Issue:15% Went Ahead with Foreclosure Process After Receiving Short Sale Application

Yes

No

Don't Know

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

15%

70%

15%

Did this short sale end up in foreclosure after a complete application was submitted to the lender/s...? N=601

Dual Tracking An Issue:4 in 10 were Actually Foreclosed Upon After Short Sale was Approved

Yes

No

Don't Know

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

42%

50%

8%

Was this transaction foreclosed upon after the lender/servicer had actually approved the short sale......? N=86

Lender Provided a Pre-Approved List Price for 1-in-5 Short Sales

Pre-Approved List Price Pro-

vided

Did not provide

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

17%

83%

2012

Did the servicers provide a preapproved list price before marketing the property?

N=575

Nearly ½ of all Short Sales had a Subordinate Lien on the Property

Yes

No

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

47%

53%

2012

Was there a subordinate lien on this property? N=580

Subordinate Lien Position for Short Sales

AverageOutstanding Balance of subordinate lien $

Average Amount accepted by subordinate lienholder to approve short sale $

Average % of OutstandingBalance Accepted

$ 103,770 $ 13,220 48%

N=182

Some Marked Improvement in Closing the Short Sale Transaction

Recent Short Sale Closed

Recent Short Sale Did Not

Close

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

53%

47%

40%

60%

20112012

Did this transaction close? 2012 N=530

1 to 14 days

15 to 30 days

31 to 60 days

61 to 90 days

91 to 120 days

121 to 180 days

more than 180 days

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

4%

8%

18%

23%

13%

21%

12%

2011 2012

Q: From the time you submitted a short sale package to the lender/servicer, how long did it take for this lender/servicer to return a written response of the approval or disapproval of the short sale agreement?

Lender’s Response Time: Application to Approval – Still Needs Improvement