In a short sale, home owners ask their lender to accept a buyer’s offer that is less than the amount needed to pay off the balance of the mortgage. Lenders who agree to a short sale also typically agree to forgive the remaining debt.
Many call short sales a win-win for lenders and homeowners. The homeowner avoids foreclosure and banks avoid the cost of carrying the property through the lengthy foreclosure process, not to mention the hassles of selling an empty property in a market saturated with other foreclosures.
On average, lenders lose approximately 19 percent of a mortgage’s value with a short sale but lose an average of 40 percent on mortgages that proceed to foreclosure, according to one source.
The problem with short sales? Like other foreclosure mitigation efforts, the challenge is in determining which financial entity “owns” the loan and, thus, has the final say on a short sale offer. Banks also have been slow to ramp up internal processes needed to review and approve short sale packages. Delays and last-minute dickering often prolong or even derail transaction closings and creates frustration for potential home buyers and their real estate agents. San Diego Realtors
If I predict recession every year I will get it right eventually.My understanding of economics is that something either goes up or it goes down. There are 50-50 odds to guess right. Some may guess 60% right but will eventually revert back to the mean. Its too bad this is a time when the system has been raped for every nickel and dime for the next few years.
Thomas
Real Estate Homes
We are facing turbulent times with the credit crunch / liquidity crisis, a very possible recession, hedge funds collapsing, small & large banks experiencing major loses and the ups and downs of the bond and stock markets.
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