Sacramento Real Estate Views

Short Sales Streamline The Distressed Sales Process

Selling Short Has Become Accepted

An article published by RealtyTrac.com cited a 19% increase in the amount of short sales being completed between the first and second quarter of 2011.  In fact, the gap between the amount of short sales to bank owned foreclosure sales is closing rapidly.

Nationwide, there have been 102,407 short sales to 162,680 bank owned foreclosure sales completed from April to June of this year, the closest this gap has been since the housing downturn began.

Selling short is not only being widely accepted among, well, your neighbors, friends and family but also with lending institutions and the government as well.

If you’ve followed my site at all, you know that I’m a firm believer in the short sale process being the best way for everyone to avoid the messy foreclosure process regardless of your situation.

If you’ve got to move for any reason or just not being able to afford paying your lender an additional $300K over the life of your underwater mortgage, a short sale is the best option.

The term “hardship” that is tossed around now has very liberal meanings attached to it whereas before the definitions were very narrow.

Time To Complete A Short Sale…..Shortens!

In addition to short sales being more widely accepted and actually getting done, the time to get them done has decreased 4.3%.  So not only can you get through the process virtually unscathed, your lender is ready for it with a more streamlined process and you can get out and on with your life more quickly.

This is in the best interest of anyone selling short.  It just needs to get done and you need to move on if not for your family for your health. Housing st

Big Discounts

In addition to everyone in the process being easier to work with as compared to past years and the time frames shortening, the discounts got larger in the second quarter.

Currently, nationwide, a short sale sells for 21% less and a bank owned home sells for 40% less than a non distressed property.

In Rocklin, a short sale sells for 14.53% less than non distressed property sale and a bank owned REO sells for 20.76% less than a non distressed sale.

In Sacramento, these percentages are closer to the national average.  Short sales sell for 18.31% less and a bank owned foreclosure sells for 36.69% less than a non distressed sale.

Now if I’m a bank seeing these numbers, I would be doing the investors that I work for a favor by allowing mortgage holders to sell short and keeping up to 18% of the selling price preserved rather than allowing the mortgage to go into foreclosure.

I’d pay people 5% of the 18% I’m saving to do it.  Guess what??  The larger banks are paying people to sell short versus going through foreclosure.  It makes too much sense and based on the above information, they’re finally getting it.

Do you have questions about your underwater mortgage or potentially selling your home short?  If so, please feel free to phone, text, email or simply fill out the form below and I’ll get right back to you.

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No Further Extensions or Postponements

Wells Fargo Action Sets Precedent

In a move that was expected after Fannie Mae, the largest mortgage investor in the country, announced in March that they would no longer be extending short sale close dates or postpone foreclosure trustee’s sales, it appears that Wells Fargo is now on board with the same policy.

Wells Fargo will no longer extend short sales or postpone foreclosure trustee’s sales for now.  I say for now as this could change as many things in this miserable housing market have.

The reason, they are citing, is because investors have asked them not to extend the time frames.

This makes complete sense given that people are staying in their homes and not paying mortgages in excess of a year when deciding that they need to give up their homes, work through the loan modification process or the other myriad of reasons that delay a process that should take about 6 months and 20 days in the state of California.

It appears that investors are done with facilitating loan modifications and are not willing to participate in the government programs that were designed to keep people in their homes.  These programs have largely failed anyway so what’s the point?

And This Means….?

What this means to virtually anyone regardless of whether or not you have a loan or are being serviced by Wells Fargo is that the days of staying in a home and not making payments for an extended period of time are over for now.

If you have a hardship situation or are strategically walking away from an underwater mortgage you have to set everything up in advance to make sure you’re not going to be foreclosed upon.

Before you miss a payment, I would advise you meet with your financial professionals to ascertain your best course of action.

Selling short is more often than not the best option to foreclosure as the credit ramifications are not as penal. Get started in advance so that you don’t run the risk of foreclosure.

If Wells Fargo, one of the largest and most organized mortgage servicers in the country is adopting this policy, it will not be long before the investors who utilize the services of other big banks follow suit.

This will speed up the foreclosure process and could potentially increase the number of bank owned homes for sale so it appears on the surface.

I’m holding a Homeowners Workshop that will address all of these issues on October 20th in Rocklin.  Click here to register or contact me for more information.

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Rocklin Short Sale Statistics

Days On Market Decrease Since HAFA

The problem with short sales has been that they take so long to get done.  The average days on market for a home in short sale status has been over 200 days in Rocklin since we started seeing them a couple of years ago.

HAFA is changing all of that.  Banks are now processing short sales faster as they have learned that short sales save them money.

Additionally, if you must sell and you’re underwater on your mortgage, as roughly 70% are in the Sacramento region, selling short a better option over foreclosure as it’s less damaging to your credit scores and financial situation.

You could call it a “win-win” scenario considering the overall housing conditions currently.

As the graph shows, short sales are now averaging about 154 days on the  market vs. 205 days on the market in the 4th quarter of 2009.  This is a significant decrease in the amount of time it’s taking to get a short sale through the system.

Have short sale questions?  Please feel free to fill out the form below or call us for more information.

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Short Sales Getting Easier (video)

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Selling Your Home “Short”

Banks Becoming More Short Sale Friendly

With help from the federal government, banks are now becoming much more short sale friendly.  Over the last six months, the banks are responding more quickly and sales are going through to close rather than being lost to foreclosure.  This is a good thing for everyone and also makes it a viable option for people trying to sell their homes when they either can no longer afford the payment or have to sell due to a situation change.

What’s a Short Sale?

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Tags: short sales in roseville, short sales in sacramento, short sales rocklin