Economists are predicting that 2012-2013 will be the ” Year of the Short Sale”, which comes as better news than 2011 being the “Year of the Foreclosure”. Despite low property values and record underwater mortgages, lenders have been persistently encouraged to allow homeowners to pursue more mortgage relief solutions this year. Hopefully, this year will bring about some much needed change in the housing market.
In some of the harder hit states, active foreclosures dominate the housing industry. In places like Nevada and Florida, there are as many as 300,000 or more homes currently in foreclosure and more than 500,000 considered to be in default. As lenders have agreed to slow the pursuit of foreclosures on potential homes, these active listings must be completed and dealt with accordingly. While 2012 is expected to bring some big numbers in foreclosure rates, the numbers are headed in a downward trend that coincides with an increase in short sale and other mortgage relief transactions.
Data Driven Decisions
Recent pressure from President Obama, the outcome of the mortgage settlement and other government initiatives has brought some much needed motivation into the offices of mortgage lenders. With an estimated 24 percent higher return value on a short sale than a foreclosure, lenders are beginning to see the potential for minimizing loses when allowing homeowners to pursue other solutions. Further, short sales minimize negative impact on the community and occupy market space by about 40 percent less time than a foreclosure. Thankfully lenders eyes are now open and many are hopeful that the Year of the Short Sale is just one small step towards industry recovery.