Banks starting to be more cooperative with approving short sales
Banks are beginning to go along with short sales in increasing numbers
Banks are beginning to go along with short sales in increasing numbers, three years into a U.S. housing slump that pushed the economy into a recession and cut resale values by 30 percent from the peak in July 2006.
Short sales almost tripled to 40,000 in the first six months of 2009 from the same period a year earlier. Yet for each short sale, there were 25 foreclosures started or completed in the first half of this year, according to data from the Office of Thrift Supervision and the Office of the Comptroller of the Currency.
Many homeowners are using a little known DIY tactic guaranteed to stop the foreclosure process in less than a day to buy some time up to several months to work out a solution
“It’s really finally dawning on banks that they’re better off with a short sale,” said Richard Green, director of the Lusk Center for Real Estate at the University of Southern California in Los Angeles. “I think banks were in denial.”
Banks are increasing such sales under pressure from the Obama administration
Banks are increasing such sales under pressure from the Obama administration and lawmakers who criticized them for favoring foreclosures and delaying short sales, Green said. Lenders and loan servicers also stand to receive up to $2,000 in incentives to close short sales under a Treasury Department plan unveiled Nov. 30.
Examples of short sale losses banks are taking
Wells Fargo: Drew Schlosser tried for two years to sell his three-bedroom Punta Gorda, Florida, waterfront condominium for less than he owed on its two mortgages. The deal only went through last month when Wells Fargo & Co. agreed to take a $165,000 loss on the loans.
Even after he had an offer of $155,000 for the property, it took five months for the San Francisco-based lender to approve the purchase, a so-called short sale, in which the bank accepts less than the balance owed on a property. Schlosser said earlier offers had fallen through as bidders lost faith the bank would take less than the $320,000 in two mortgages.
Bank of America: Pat Meislik, 63, started looking for a house in San Diego in March and said she felt locked out of the California market until short sales in her price range became available.
Meislik closed on a three-bedroom “fixer upper” for $280,000 in May. “By the time it ended I felt lucky.”
Lender Countrywide Financial Corp., now part of Bank of America, lost about $150,000 on the $406,000 loan to the previous owner, said Meislik’s realtor Deborah Reed. Wells Fargo settled the second $47,252 mortgage on the home for less than 10 cents on the dollar, she said.
New Treasury Department guidelines to help expidite short sales
Pressure is building to approve short sales as the number of delinquent mortgages has grown to 3.2 million and an estimated 7 million foreclosures loom in the next two to three years, according to Irvine, California-based RealtyTrac Inc., which compiles and sells U.S. mortgage delinquency data.
New Treasury Department guidelines for foreclosure alternatives scheduled to take effect in April 2010 will require lenders to consider borrowers for a short sale on their primary residence 30 days after missing two consecutive payments on a modified loan or after the borrower requests a short sale.
Source: http://www.bloomberg.com/apps/news?pid=20603037&sid=aUUKgeazm0GA
Before letting a bank force you out of your home, you may want to obtain some coaching on how to stop the foreclosure process dead in its tracts and buy some time to make your next move
If you’re interested, you can check out the website for more information here
| Homeowners – Need Some Sound Advice? | |
 Get Out of Debt Workbook Seasoned debt expert shares several little known but highly effective techniques guaranteed to get you out of debt fast – no matter how much you currently owe. |
Loan Modification Get more help on fighting for your loan modification including tools and strategies, Q&As, how to qualify for the HAMP program, scam alerts and news on the latest loan modification efforts among the banks and government HAMP program. Legally Restore Your Credit |
stop foreclosure, foreclosure help, avoid foreclosure, prevent foreclosure, foreclosure prevention
Technorati Tags: stop foreclosure, foreclosure help, avoid foreclosure, prevent foreclosure, foreclosure prevention
Related posts:
- Bank of America streamlines short sales process Bank of America, widely recognized as the most uncooperative lender...
- New government rules help facilitate short sales This week the Treasury Department released new rules that will...
Related posts brought to you by Yet Another Related Posts Plugin.
