The Year of the Short Sale
So 2010 seems to be shaping up to be the year of the short sale. Big US banks including Bank of America, Wells Fargo, JP Morgan Chase and Citigroup are turning to short sales to clear their books of troubled mortgage loans. Short sales are where homeowners settle their debts by selling their properties for less than the mortgage value.
It is expected that the number of short sales will climb sharply this year as home values continue to decline, leaving many homeowners underwater on their mortgages.
B of A, Wells Fargo, JP Morgan and other large banks said they were shifting their attention to short sales, after spending most of the past year focusing on largely ineffective loan modification plans.
There are a number of large mortgage servicers that are scrambling to make the most of this shift. Wells Fargo is holding seminars to teach real estate brokers how to conduct short sales. Citigroup created a unit to expedite short sales and recently announced a pilot programme that gives home owners who voluntarily turn in their deed to the bank a minimum of $1,000 in relocation expenses.
It appears that short sales are a faster growing segment of the housing market than foreclosures at this point and that is worth noting.
This is all happening as the US government prepares to begin a program in April that encourages homeowners, lenders and investors to complete short sales by offering up to $3,500 in incentives.
Calabasas and Westside real estate and homes for sale