Mar

1

Short Sales

March 1, 2007 |

Short Sales
Just what is a short sale? this term has been appearing lately.
A Short sale is when the lender agrees to write off and accept a lesser amount than what is owed on the mortgage. This is a safety net for some homeowners that have fallen on hard times and can no longer afford the home they own. Experts agree that a softer economy leads to foreclosures and short sales can be the solution. 

In the early 90’s  we saw many homeowners opt for the short sale as a way to bail out of the mortgage. It does beat having a bankruptcy or foreclosure.
Data from Mortgage Information Corp., states that 16 percent of homeowners are seriously delinquent, 90 days late on their mortgage payments. Those numbers are over twice the rate of delinquencies from 1999. And three times as high as the 1998 figures.
Todays mortgage debts which range from $250.000 to over $1 million,  are larger than ever.
Who is at greatest risk? homeowners who came in with little or no down, who feel they have nothing to lose as they have very little equity.
Quoting Mortgage Information Corp., “new borrowers from 2000 who took out “subprime” mortgages high-rate home loans designed for buyers with imperfect credit histories are performing even worse”.

Mortgage Information Corp., says the stats on loan delinquencies on subprime mortgages rose 21 percent and those numbers are higher than subprime delinquency rates in the previous three years.

A short sale must be lender approved and Realtors work closely with banks to ensure that the sale proceeds smoothly.
Does the short sale have any fallout? Yes. For all the details, give me a call or send an email and I’d be happy to discuss options with you.

 


Comments

Name (required)

Email (required)

Website

Speak your mind