It has been long predicted that another wave of foreclosures is expected to hit our housing market in the near future. The Southern Twin Cities Association of REALTORS recently reported the following:
Some economic observers are predicting another wave of foreclosures will occur later this summer or in the fall. That's because lenders that have held off on foreclosures as part of President Obama's plan will now move aggressively to clear the backlog of troubled mortgages.
Rising foreclosures will further depress home values, says Mark Zandi of Moody's Economy.com, who calculates that 15.4 million homeowners (one in five of those with first mortgages) will be underwater.
Seth Wheeler, a senior adviser to Treasury Secretary Timothy Geithner, says the government is "unlikely to implement another moratorium." But Wheeler says the government plans to put in place some programs that encourage lenders to try some alternatives to foreclosure.
And trying alternatives to foreclosure they are doing! Banks are trying some interesting techniques to keep people in their homes and prevent a short sale, even when the homeowner no longer wants to own the property.
Most recently, some banks have given sellers the option that unless they sign an agreement whereby the seller agrees to make partial payments on their home for a set period of time, the bank will refuse to look at any offer on the property (in a short sale situation). This scenario really holds a seller against a wall. They cannot sell their home without bank approval, and the bank won't approve the short sale unless the seller agrees to sign the partial payment plan. It's non-sensical. In cases where the seller is far in arears on the mortgage payments, the bank is simply delaying the inevitable.
All we can do as realtors is continue to try to market short sale properties and work diligently with the bank to get the offers approved. Depending on the bank and the amount still owed on the mortgage, this task is often times nearly impossible. But miracles do happen, and until the housing market turns around, or at the bare minimum, reaches the point to where it once was before the decline, we will continue to do our best to help sellers avoid foreclosure by listing and marketing short sale properties.