Thursday, May 17, 2012

Short sales up

Most of the news today is that foreclosures are at a five year low and although this looks like good news what is not brought up is that short sales are up.  What does this mean, it means people are still losing their homes, banks are still not working with the homeowner, and they are ultimately speeding up the process of getting possession.

"I think we will see more states with short sales outnumbering foreclosure sales in the coming months," says Daren Blomquist, RealtyTrac vice president, in an e-mail. " In addition to the government incentives they can get for a short sale through the HAFA [Home Affordable Foreclosure Alternatives] program, lenders are realizing they can often recover more of their losses through a short sale than through foreclosure, and also that they can avoid any accusations of improper foreclosure procedures."

The crazy thing, like the short sale on our home, Chase was willing to forgive over 400,000 on our loan in a short sale but would never consider working with us.  So although foreclosures being down may look like a good sign it is not necessarily so.  And short sales still affect the value of everyone around them.  Just like a foreclosure a short sale becomes a comparable for every property around it.  So the "responsible" homeowners who have made their payments all along because they were able to are losing equity daily due to the banks choosing not to work with homeowners.

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