Short sales becoming a preferred method for lenders
Published On: June 21, 2012 Posted by: TownsRealty
Foreclosure proceedings against homeowners were up in May and that sets the stage for homes values to go down even more in coming months.
Default mortgages or home auction notices saw an increase of 12% from April of 2012. May of 2012 was the first month since January of 2012 where such an increase was seen from month to month.
Foreclosure activity slowed down sharply last year as banks were dealing with allegations that they had been processing home foreclosures without verification of the documents.
In February of 2012 a huge settlement of $25 billion was reached between the U.S biggest mortgage lenders and state officials. Since then the banks are moving against homeowners who have fallen behind on their mortgage payments.
Good things about short sales are that lenders are opting to resolve foreclosure cases via short sale, rather than repossessing the properties via foreclosure.
This year the short sales were higher in number than bank owned properties. Short sales are becoming, as they should, the banks preferred method.
A foreclosure process can cost the banks to an up of $50,000 per property whereas processing a short sale minimizes their costs a lot.
Also, bank owned properties are selling cheaper than short sales and that drags down the homes value, making the recovery of the real estate market difficult.
If you have need to short sale your home or you are in the process of foreclosure, please call Towns Realty to discuss your particular situation.