Wow, I'm not sure how the market is in your neck of the woods but here in SW Florida it is almost like the crazy movies of the Wild West. On one side the Florida legislature is trying to get a proposed "F
oreclosure Bill of Rights" through while bankers are trying to push a bill to do away with legal proceedings in foreclosures altogether by creating a non judicial foreclosure system which they say should speed up foreclosures by 90 days.
On another front, local governments burdened with the high cost of trying to push through a record number of foreclosures are looking for lenders to pick up more of the costs of these cases. This should mean that short sales will be increasing as foreclosures are getting more expensive for the lenders. The new HAFA (Home Affordable Foreclosure Alternative Program) that is part of the HAMP (Home Affordable Modification Program) tries to do this with new rules that should speed up the short sale process. This should make everyone happy and take care of the problem a little faster.
Maybe it's just me or maybe I'm just not getting it, wouldn't it be better for everyone if they made the short sales faster and easier.
1) The banks would fair better because the homes would be in much better shape and the prices would be higher.
2) The owners wouldn't get hit as hard on the credit side and could get their lives back in order in a few years.
3) The courts wouldn't have the backlog of cases to handle and the local governments would not have the extra expense of all the court costs.
I've heard of cases where the lenders are even paying moving expenses or incentives like cash payouts to entice a homeowner to short sell a house rather than making the lender foreclose. Citigroup, for instance, plans to announce a pilot program that would allow delinquent borrowers who do not qualify for or decline mortgage relief the opportunity to stay in their homes up to 6 months without making payments before turning over the keys, in return for keeping the property in good condition.
Moody's economy.com has forecast the number of short sales and the number of borrowers who surrender their deed in lieu of foreclosure will increase more than 50 percent this year. Even with this increase the powers to be must do a better job to get the more than 1.9 million homes predicted to be lost to foreclosure this year through the system and sold on the market at a quicker pace.
One thing is for sure, that this year is gearing up to be a crazy and wild time in the Real Estate world. The best thing to do is be ready for it.
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