Short Sales Powerless Against Housing Crisis?
Posted on: September 15, 20101 comment so far
A recent report has revealed that one of the solutions that are expected to put an end to the housing crisis is not that effective after all.
According to the Philadelphia Inquirer, short sales are not having their intended effect on the real estate market. The newspaper said that one of the reasons why short sales is deemed ineffective by some industry experts is that certain lenders are less likely to agree to a short sale as compared to others. Because of this, many distressed homeowners were left with no other choice but to have their properties foreclosed by the bank.
During a short sale, a lender agrees to sell a borrower’s property at a price lower than the mortgage amount owed by the latter. Many experts agree that as compared to foreclosure, short sales are considered less financially devastating to lenders and to the housing market in general. Aside from preventing foreclosures, they can also help a homeowner stop his or her credit score from declining further, which will make it easier for the borrower to apply for a loan to purchase a new home.
The government has recently established the Home Affordable Foreclosure Alternative in a bid to promote short sales among lenders and to help distressed homeowners who do not qualify for mortgage loan modifications. However, reports said many federal officials are not satisfied with the results of the initiative.
September 16th, 2010 at 3:16 pm
Being in the middle of this proces personally in California, I can say the Big Banks such as WF, BofA and Chase are much better about processing and dealing with SS. It is a much better alterntive than having to foreclose for the banks and property owners.
In my case with the asistance of a realtor who has done more than 30, it has moved smoothly and the process took less than 60 days from start to finish, this was involving Chase Bank. My experience is probably exceptional given the work my selling agent put in and being proactive on supplying Chase with all the documents they needed. Once I supplied the original packet requested, I had to re-supply, up to 4 times the same info to them again and again. You remember not to get frustrated. I copied the enire original packet sent, and then when they wanted additional copies of documents already sent had them ready to copy and just resend. As the person asking the bank to agree to forgive your debt, it is good to remember you are the one asking for esentially a big favor, and if they need 4 copies of the same document, give it to them and don’t complain. Doing what is asked speeded my personal process and end result. I would suggest however, you have an agent who is experienced, by past transactions, in the process, hire an attorney, one who has done short sales before, and preferbly has a program within his or her office specifically for short sales. You should not have to pay more than $2,000 for this service.
So in So.Cal. and by my personal experience I would disagree with the report. But kep in mind that the area I live in has a 40% Short Sale percentage of total sales for the area and rising. My realtor has said S.S. are starting to be the norm and traditional sales are few and far between.