Sacramento Real Estate Views

Foreclosure Cancellations Continue To Rise

Short Sales, Loan Modifications Reducing Foreclosures

A report today from ForeclosureRadar.com confirms that banks are favoring short sales over foreclosure.  Foreclosure cancellations are at all time highs and the result is fewer foreclosed homes coming on the market and an increase in short sales available for sale.

While short sales and loan modifications aren’t the only reason for the reduction in the foreclosure inventory of homes for sale, this is a clear indication that the governments efforts to stem the tide of foreclosures is working.

Foreclosure Time Frames Also Rise

The time it takes the banks to foreclose is also a sign of short sales and loan modifications are being favored over foreclosure.

The time it takes to foreclose on a home in default has increased from 163 days in November of 2008 to 239 days in April of 2010.  That is a 46% increase in a year and a half time frame.

Lenders and servicers are giving homeowners more time to get either a short sale or loan modification done.

The fact is, foreclosing costs more money than keeping a homeowner in the home or allowing them to sell it short.  Selling short is just a better financial decision for everyone involved.

1)  It costs the investor who holds the mortgage less.

2)  It costs the homeowner nothing to sell short.

3)  Homes don’t sit in neighborhoods vacant for vandals to abuse. An occupied home isn’t a target.

4)  Homes in better condition sell for more money.  Short sales are better taken care of than bank owned homes.  This helps to maintain values in neighborhoods.

5)  Time frames have shortened and the lenders/servicers are making it easier to get a short sale closed.

The acceptance of short sales is the pathway back to a normal market in the Sacramento region.  While this housing crisis is not even close to being over we can see the light at the end of the tunnel from here.

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This entry was posted on Tuesday, May 11th, 2010 at 2:19 pm and is filed under Foreclosure Statistics, Short Sale Information. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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