Since the crisis began, banks have been forced to undertake a massive expansion of their "loss mitigation" departments, adding thousands of workers to handle the unprecedented volume of requests for loan modifications, short sales and foreclosures.
JPMorgan, which owns some mortgages and acts as a loan servicer for many Freddie Mac- and Fannie Mae-backed loans, says it has hired 6,000 employees since 2009. Wells Fargo says it has added more than 12,000 employees over roughly the same period.
Jeff Lischer, managing director for regulatory policy at the National Association of Realtors, says banks had little experience with short sales when the housing crisis hit and that it took them a long time to add staff to handle these kinds of sales.
As late as 2008 — two years after the housing market began to implode — "it looked to NAR like the banks didn't understand the scope of the problem," Lischer says.