Home Short Sales: A Better Alternative?

By
Real Estate Agent with Coldwell Banker Residential Real Estate
Due to recent government incentives, home short sales are becoming the darling of the distressed-property marketplace. A short sale keeps owners out of foreclosure, because the lenders allow the homeowners to sell their house for less than they owe.

Banks have really sped up the process, hiring large numbers to serve the short sale specialty. In early 2010, one of the very largest banks had more than doubled the number of home short sales it approved, sometimes as quickly as 24 days. Compare that to last year, when short sales stalled indefinitely or took more than six months to complete.

The biggest roadblock to approval was often a second mortgage held by the seller. Since the primary lender must be paid first, the second lien holder could be left with nothing, and they would basically kill the sale. But now the Home Affordable Foreclosure Alternatives (HAFA) program provides money to primary lenders who share the proceeds with the second lien holders. HAFA also provides up to $6,000 to those secondary lenders if they release their claim.

Short sales keep borrowers out of foreclosure and reduce the impact on their credit. While foreclosure can shave 200 points off your score, the penalty for a short sale is only half of that. Hopefully, a boom in home short sales will also bring us closer to ending the ongoing foreclosure crisis.

Mike Morgan
Team Morgan
“For Every Move You Make"

Whether you want to buy or sell a home in Miami, Palmetto Bay, Pinecrest, Dadeland Walk, South Miami, Coral Gables or Cutler Bay, you can depend on the Morgan team of realtors to assist you every step of the way during your real estate transaction.

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Graziella Bruner 04/20/2011 01:27 AM
Tags:
foreclosure
lien holder
home short sales
home affordable foreclosure alternatives
hafa

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Rainmaker
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Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Real Estate Agents - Luxury - Divorce

Get the training...become the expert...give back to the industry and community you love.

Apr 20, 2011 01:18 AM #1
Rainer
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Bernadine Hunter, SFR, ACRE
Keller Williams Greater Columbus Realty - Pickerington, OH
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For many homeowners, it is the only alternative that makes any sense. Now, if we could just get all the banks on board with cancelling the loan deficiency.

Apr 20, 2011 01:26 AM #2
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Rainmaker
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