Are Short Sales going mainstream?

As I go about my daily business of conducting short sales in the North Port, Port Charlotte and Punta Gorda areas of southwest Florida, I've noticed an interesting trend.

While in the past it was generally expected that you had to have some kind of hardship to qualify for a short sale, now the mere presence of a deficit between what you owe and what your home is worth, is considered a hardship in and of itself!

Most of us can readily accept that loss of a job, death of a breadwinner, medical emergency, divorce and a multitude of other factors can cause a hardship which can legitimize a short sale. It becomes a little more murky when the hardship is the simple fact that you're underwater or upside down.

Lets face it, a home is often the most significant investment the average family has. And maybe even the only one! It's so much more than simply a place to seek shelter!

So, what's a responsible short sale broker to do?

There are two sides to the story here.

Should a bank eat the loss of a home which is basically nothing more than an investment gone bad? Try persuading your stockbroker to eat your loss when the market takes a dive! Lots of people got swept up by the home-buying hysteria, were eager to get 'into the market', and made bad (in retrospect) decisions to buy. Is the lender responsible to fix your bad investment decision?

Or, should the banks take the responsibility for the whole enchilada. They made bad loans to a lot of pretty marginal borrowers who were almost certain to default unless the home they purchased kept appreciating at double-digit rates! Have the bad loans these banks made been responsible for the entire housing collapse? At what point should personal responsibility come into play.

Life go's on and people need to move and sell their homes. Sometimes it's worth less than they paid! And sometimes they have no choice but to start the short sale process even though no particular hardship exists.

There is no clear cut answer to these perplexing questions. Any compassionate person has to feel for the family whose major - and sometimes only - investment has gone sour. Any responsible citizen wonders where this trend will lead over the next few years.

And if you're looking for an answer - sorry, I don't have one!