Short sales and the financial bailout. How will it affect our business?

Hi Helga,

No, I hope it won't become like the DMV. I'm hoping that the government ends up just loaning with stock options rather than just bailing them out. In response to your short sale inquiry, I wanted to do a short sale with Ocwen recently but they are refusing to speak with Real Estate agents. They want to work out something with the homeowner instead.

I can only make the assumption that the short sale will soon be a distant memory. Logic leads me to the assumption, why would a bank go short when it can turn the debt bad and hand it off to the taxpayer. the EEAS 'bailout' plan has placed tremendous emphasis on loan modifications.

Here is the link to read the official plan. http://www.house.gov/apps/list/press/financialsvcs_dem/press092808.shtml

as a footnote i have included a letter written by Thomas Jefferson to the Secretary of the Treasury.

Thomas Jefferson's Warning To America : "I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." Written by Jefferson in a letter to the Secretary of the Treasury Albert Gallatin (1802).

I Sure hope we know what the heck we have got ourselves into.

Chris Giddings

i think they may become a thing of the past

I have not seen any speed on the part of lenders in the handing of short sales, getting foreclosed homes on the market or responding to offers on properties.  I have a client interested in a home that went to auction in May.  The first week of August the preliminary paperwork was sent from the lender's REO department to the broker who will be listing it, but it is still not on the market.   It is very frustrating to listen to the media regarding all the problems in the mortgage industry, knowing the lenders are compounding their problems with their inability to prioritize and handle things in a timely manner.

I think short sales will be here for awhile. There are too many homes on the market and too few buyers. Prices stay down for awhile longer.

I think the short sale will be a minority very soon. I do believe the options for the sellers of duress property's are opening wide up.

I think short sales will continue for a while. I see a growth in notice of defaults in our area (CA) and I'm sure other areas too.  I am expecting some delays in the approval of short sales because of the closeout of banks. I am in contact with a lot of bank reps and I heard stories that files are being moved from reps to reps because people are leaving. So, we'll see what happens.

Helga,

Thanks for the post. Places like Florida, California, Colorado, Nevada and Ohio may continue to see short sales in the marketplace longer than other states, simply because of the volume of distressed properties. However, I think and hope that the short sales will become the true minority in the marketplace. The process is so tenuouswith lenders ill equipped or unwilling to address the problem. This creates a long and arduous process which can result in the buyers walking away. removing the short sales reduces the inventory, buyers have fewer choices, decisions are made sooner and sales are consummated.

I have already seen the new "Loan Modification" companies springing up with fees of $2500 - $3000. For the same service that lenders are equipped to provide at no additioonal cost.