It’s Always about the Money

Feb 8th, 2010 | By | Category: Homeowner Advice

Short Sales | Always about the money | The Sahuarita ConnectionLike it or not, short sales are part of our market and will be for at least a few years. One of the biggest mysteries to me over the last year has been why banks haven’t been more receptive to the ‘short sale’ process. Too many short sale deals have fallen apart solely because of a bank’s lack of response and cooperation. Studies have shown that it costs the bank more money if a property goes into foreclosure than if the bank accepts a short sale offer. So why haven’t banks jumped at the chance to recover more money?? The answer seems to be that they just weren’t prepared to evaluate and process large numbers of short sale requests. Some significant changes are in store for lenders who are faced with short sale approvals. The Treasury Department has issued a Supplemental Directive 09-09, also called Home Affordable Foreclosure Alternatives (HAFA) that stipulates rules that loan servicers will have to follow beginning April 1. Those rules include time limits for approvals and standard operating procedures that promise to streamline the short sale approval process. It will be interesting to see how these new rules are applied. Let’s hope they will lead to less frustrations for sellers, buyers, Realtors and lenders!

For struggling homeowners, a short sale makes more sense than foreclosure for several reasons:

  • A short sale has less of a negative impact on the homeowner’s credit rating.
  • The homeowner would have at least some control over the timing of their relocation to new living arrangements.
  • A short sale allows the homeowner to leave with dignity.

Why should everyone pay attention to these changes? With so many homeowners owing more on their mortgages than their homes are worth, we must face the fact that short sales will be a part of the real estate market for years to come. And we must realize that a short sale is much better than a foreclosure for our neighbors and community. Foreclosures tend to include stripped or trashed homes that have to be priced ridiculously low in order to sell, which of course can drag down the value and appeal of a
neighborhood. Short sale listings are typically in much better condition and therefore hold more value.

If you’d like more information, please don’t hesitate to call me at 248-2130, or email at TheSahuaritaConnection@cox.net .