WSJ - Short Sales Stepping Out

The move to short sales is an ongoing theme on this blog. No wonder - I have believed that short sales are the better solution for an upside down homeowner since 2006. Common sense seems to be prevailing all over, and we are now seeing the nationwide trends support what we have been advocating all along. Here is the latest WSJ article talking about how short sale closings are now outnumbering REO closings in Phoenix, Los Angeles and Miami - three of the hardest struck markets in the country.

Expect More Short Sales in 2012 (if all goes as planned)

The move to short sales. This is a theme that I keep returning to, as the financial juggernauts see further benefits of approving short sales, rather than going with the "traditional" REO model, when faced with someone who is unable (or unwilling) to keep their upside down house. More good news here, this time from Fannie and Freddie, via their presentations at the MBA servicing conference. Full articles here.

MSNBC - Increase in short sales give market a little breathing room

Another article talking about the move away from foreclosures and short sales. Couple of interesting points:

• Blaming the robosigning scandal for the slowing of foreclosures. This seems simplistic to me ... I think it's simpler than that - banks net more money in a short sale, and they are in business to increase the profits and minimize the losses.
• Honest assessment of foreclosure vs. short sale credit impact (immediately after talk of "torching" credit ratings) - Fair Isaac says they are the same. And yes - all future movement shows that lenders prefer to see a short sale on the  report, and give loans sooner.
• Value preservation, and better for the neighborhood. This is a great, and often overlooked point. Not only doing what is best for YOU, but also what is best for OTHERS.
• Ability to negotiate the settlement pre-foreclosure. Yes, this is true in states without anti-deficiency statutes, but it is also true in states where certain loans are not covered by anti-deficiency statutes (like most HELOC's in Arizona).
• Vandalism of vacant homes. This is HUGE - massive issue that is not addressed often enough. I cannot tell you how many homes I have seen with AC's and plumbing stolen - in a short sale, the property is typically occupied until the day of closing, at which point the new owner moves in.

All in all, a bit surfacey, but good reading, and obviously I agree with the overall conclusion. Click here to read the full article.

The shift to short sales.

Arizona Republic published an article about something I have been discussing for a long time on this blog - the shift to short sales. However, I disagree with one of the premises of the article - that the lenders changed their mind. The entire reason they started short sales, is that they net more money for the servicer and investor. Do not be deceived - a bank is a corporation, whose goal is to increase the profits and decrease the losses for their investors. EVERYTHING they do can be explained using one of those categories.

So, it isn't that they woke up one morning this year thinking that they want short sales, it's that their process is finally to the point where they can do them more efficiently. The other factor, is that the real estate industry finally has the skills and the knowledge to get short sales done. Back in 2006, when I first started doing short sales - I wanted to do them, and the banks wanted to do them. It's that neither of us had it figured out. Five years later - we still have much to figure out, but much progress has been made as well.

Let's keep working at it!

Read the full article here.