Sellers trying short sell their homes find that lenders the biggest obstacle to closing the deals. Filing a consumer complaint may help.

Q: I am having a horrible time dealing with my mortgage lender (one of the big five that was just named in the $25 billion foreclosure settlement) in getting my short sale to close.

I’ve done everything they’ve asked and required, signed all the paperwork, the buyer has done everything, and yet they still are not working with me. Even my call to the CEO has gone unanswered. I’m at the end of my rope, out of money, and my once-excellent credit has been ruined. I just want this nightmare to end.

Is there anything else I can do?

A: Many lenders have been understaffed and overwhelmed by the volume of calls, problem loans and requests for short sales. That’s not an excuse for failing to respond to borrowers’ requests, losing paperwork, neglecting files and an inability to process paperwork. Unfortunately that’s the state of many of our lending institutions these days. That may leave you in short sale hell, where the process takes forever, you lose your buyer and can’t get a deal closed.

You might try filing a complaint with the attorney general’s office in your state along with a complaint with the Office of the Comptroller of the Currency. You can file your complaint with the OCC online at Even your complaint these days may not get much attention as the OCC has received a fair number of complaints and may take a while to get to yours.

In addition, your state’s department of banking and finance may have an ombudsman set up to deal with these sorts of complaints (depending on which state you live in, there are thousands of complaints about lending institutions).

You need to persist in your quest to get the short sale approved. If you are working with a person that has input the information into the system that your lender uses for short sales, you should request that he send out an email to the negotiator on your file to know where things are. If a negotiator has been assigned to your file, that person should be responding to your requests for information.

If you are not getting responses or any help with your short sale, the computerized system allows you to send an email to various people who work for your lender to tell them that you are not getting any information on your file. All you can do is persist in your quest to see if the short sale will be approved. It can take months, or years.

As you move through the short sale process, you need to know that mortgage lenders have no obligation to approve the short sale process. They might think that the property is worth more than the offer that was given to you (they might be very wrong), that you still have money to pay and can continue to pay on the property, that there might be some errors in the paperwork, that the buyer isn’t a real buyer or that the buyer intends on flipping the property.

For any of these reasons, your lender might hold onto the file and refuse to accept the short sale offer.

When homeowners were going through their loan modification process, we used to say that they were in loan modification hell. As homeowners realized that lenders weren’t actually going to give them permanent loan modifications, many have opted to try to sell their homes. And the process continues and goes from loan modification hell to short sale hell. You may find little help with your lender, but perhaps you might be able to get some short sale help by filing your complaint.

Finally, while you say that you just want the nightmare to end, the question you have to answer is what nightmare are you actually in. Many short sale sellers have stopped paying their mortgages and are using the money they have saved from their mortgages to pay other expenses. For those homeowners, they may be living for free in their homes while the foreclosure process is going on or while they try to sell the home in a short sale.

You didn’t indicate what your situation is with your home and your short sale, but if you are represented by a real estate attorney, you may want to go over the whole short sale process and see what your options will be in case your lender fails to approve your short sale or, as you have said, drags their feet in approving your deal.