Are Short Sales becoming a thing of the past? It seems like this is the way the market is moving. Fannie Mae and Freddie Mac own or guarantee $5.2 trillion of mortgages, more than half the outstanding U.S. home loans.
Starting in March Non-delinquent borrowers with illness, job changes or other reasons they need to move will become eligible to apply for a deed-in-lieu transaction that erases the shortfall between a property’s value and the size of its mortgage.
Team this with the fact that Fannie Mae is now artificially inflating property values through their high Short Sale counters and their Homepath program and you can see that Short Sales are no longer the first option for these two mortgage giants.
It’s clear that the goal is to take over ownership of properties so they can sell them once the values increase. Or the properties can just be sold through Homepath at a higher than market price since an appraisal is not needed with this program.
Short Sales are drying up:
- There are about 7 million underwater properties, worth less than the mortgages on them, down from 11 million in 2011, according to JPMorgan Chase & Co. (JPM) Within two years, the number of upside-down home loans could drop to 4 million, the New York bank said.
So....if you handle Short Sales for a living it is time to start looking for alternative income streams. I know I am.
What say you?