Short Sale Update 7-2-10

Posted on 02. Jul, 2010 by ctlms in Foreclosures, My Blog, News, Real Estate, Short Sale

The Good the Bad and the Holiday

In this issue I have a few industry updates.

The Good

1. President Obama today signed into law the extension to the closing deadline for the first time home buyer tax credit extending the deadline to the end of Sept that were under contract by 4/31/10.  According to NAR this will save nearly 180,000 buyers from the losing the credit due to financing and short sale review delays.

1. Short sales still prove to be a better alternative to foreclosure for the lenders bottom line.  According to a resent RealtyTrac report Short Sales net and average 19% higher return to the lender than foreclosure.  Short sales averaged sales prices of 15% below market value while foreclosures net 34% below market value usually due to the deteriorated condition of the property after it has been foreclosed and vacant for some time.

The Bad

1. Pending home sale tumble 30% in May.  That's right, in the month after the first time home buyer credit expired, pending home sales dropped 30%.  This shows just how important this incentive has been to the real estate market.  Keep in mind though that some of May's sales we stolen by April by buyers trying to meet the deadline.

2. So far we have seen virtually no change from the implementation of the HAFA short sale process.  In fact of the 70 short sales we are current negotiating, only 2 qualify for HAFA.  The biggest reason is that FHA, VA and until just a couple weeks ago, Fannie Mae and Freddie Mac loans did not qualify.  Fannie and Freddie do now participate in their own version of the HAFA program but their servicers do not have to begin accepting those applications until 8/1/10.  Also the 2 short sales that we are working through this program have already shown to be taking longer than that lenders normal short sale review process.  One of the biggest selling features of this new program was supposed to be the reduced review time they take.  NOT!

The Holiday

Enjoy it.  Take a break.  Relax.  I have no choice in the matter, as Bank Holidays are my holidays, for the most part.  I have some paperwork to do on Monday to prepare for the short week.

Remember to thank your service members.

Have a great Independence Day!

Sean Wilder

Tags: , , , , , , , ,

Leave a Reply