Alright if you haven't heard about the foreclosure freeze already I suggest you flip on your television because it is all over the news. Due to the corruption in the banking system, which we all knew was there for a loonnnnnnggg time now, foreclosures in several states are coming to a halt. As I was talking to my broker we where discussing what effect this is going to have on the Short Sale market, and we determined it is going to be one of two extremes with these homeowners.
First Scenerio: With foreclosures coming to a halt, it might make it easier to negotiate these short sales with the banks since foreclosing is no longer an option and making the process go by alot quicker, and smoother, and you we might actually be getting people on the phone, on the banks end, of people that actually display some intelligence and genuinely want to negotiate this short sale and have legitimate answers. So it will be easier to help defaulting homeowner's get out of their current, hard situation.
Second Scenerio: The defaulting homeowner realizes that hey I can stay here without paying my mortgage for a little longer and they are not going to do anything about it since I know my house isn't going to foreclose. Though it may seem to be a benefit for the defauting homeowner, all it is doing is delaying the inevitable. They will still lose their house. But this is what I am afraid of, we do not know how long they are going to halt the foreclosures, it could be 6 months, a year, 2 years, I am afraid that the longer these defaulting homeowners stay in their houses rent free, the more they are going to fill they have the right to strip it and completely trash it once the freeze is lifted and the bank starts handing out eviction notices like they are going out of style.
I view this as a window of opportunity for those that are defaulting on their homes to take advantage of this time NOW while these banks will have no other option but to negotiate with them in regards to a short sale, because once that freeze is lifted, all hell will break lose, and these banks will not show any mercy.
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