Short Sales Are Still The Best Option for Many
Posted by Hamid Grinage on Thursday, February 11th, 2010 at 4:39pm.Many of us were hoping that the short sale phenomenon was going to be temporary, but it's turned out to be a huge percentage of the sales in our area throughout 2009 and into 2010..with no end in sight. There are so many homeowners who are "underwater" that many of them are choosing to attempt a short sale. For most of these people, the only option other than a loan modification is to continue paying your mortgage or walk away and foreclose. Loan modifications aren't popular with many, because the modification in most cases will not change the principal balance of the mortgage, but rather reduce the interest that the borrower is paying on that balance. For many people, the thought of continuing to pay on a mortgage balance of say $700,000, when the property is now worth $375,000 is a bit too much to swallow.
Analysts are predicting that short sales will continue to be a large percentage of sales for at least the next 2-3 years. On the positive side, there does seem to be some progress in the fight to streamline the short sale process and make it more like a normal transaction. The negative aspect of short sales continues to be the lengthy time period (up to 12 times longer than a normal sale!) due to the need to have the lenders approval of the sale, so if the process is streamlined it will better serve everyone involved.
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