Homeowners may soon find some more confidence in lending and mortgage debt solution practices as a recent report stated that foreclosure alternatives are on the rise. Short sales transactions have surpassed foreclosure numbers for the first time in many years.
According to the latest data, the number of U.S. homes sold in short sales exceed the number of foreclosure deals. Short sales accounted for 23.9% of home purchases in January of this year, while foreclosures accounted for 19.7% of sales. This data indicates that changes are happening in the industry and we may be looking at a brighter future.
Banks have become more agreeable to foreclosure alternatives such as short sales, refinancing and some loan modifications. Why the big change? Largely, government incentives. After the federal government stepped in to intervene in the foreclosure crisis, there has been much focus on providing homeowners with better solutions and lenders with the incentives to be more flexible in their lending practices. Furthermore, lenders are beginning to realize that short sale can minimize their risks and even provide an average of 29% more at the time of sale compared to a foreclosure.