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Short Sales become the Flavor of the Season


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Short Sale Trends

 

This year is all set to go down in history as the Year of the Short Sale.  We saw a record 33% year-over-year increase in short sales in January, and the numbers seem to indicate that this trend will continue for at least the next several months.


A short sale is a process by which the bank holding the mortgage agrees to accept a price which is less than the sum owed on it.  Short sales can be found on both homes and investment properties, and are a good alternative to foreclosures as they can save the lenders thousands of dollars in ancillary expenses such as property taxes and insurance.  Plus, they are extremely attractive to homebuyers because of the discount relative to the price tag.  The main downside is that banks are notoriously slow in processing these deals.


However, things seem to be changing, as the lethargic recovery in the housing market seems to be prompting banks to open up more distressed properties to the short sale process.  The Federal Housing Finance Agency is also promoting the process by announcing new guidelines that will require lenders to review short sale requests within 30 days and arrive at a decision within 60 days.  These guidelines will go into effect beginning June 1, 2012.

If you are interested in learning more about this, a great CNN Money article that delves much deeper into the subject matter can be found here.



One Response to Short Sales become the Flavor of the Season

  1. jay says:

    Wow I had no idea that these rules were about to go into affect… I’d better get moving… thank you

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