Era Of The Short Sale Has Arrived. Hallelujah!
Maybe you weren’t convinced the first time I told you the era of the short sale was finally upon us.
I can’t blame you for thinking that banks were acting irrationally when it comes to the foreclosure process.
But Lender Processing Services just offered up the most convincing numbers to date that short sales are no longer just some pie-in-the-sky dream for distressed underwater borrowers.
For the first time in the US, LPS says there were more short sales in a single month then there were foreclosures.
In January short sales made up 23.9 percent of home sales, while foreclosure sales made up 19.7 percent of all home purchases.
Of course that means that over half of all real estate closings are for distressed homes.
A year before, the percentages were skewered in the opposite direction. In January 2011, 16.3 percent of home purchases came through short sales, and 24.9 percent were foreclosures.
Why are the banks now convinced, as I was long ago, that going through the long and harrowing process of a foreclosure is not their best option?
The proof is once again in the numbers. On average, foreclosed homes sold for 29 percent less than non-distressed properties in January.
Homes sold via short sale? They went for 23 percent less. Here in Florida, LPS says short sales have outnumbered foreclosures since July.
That means short sales are a better deal for the banks, plain and simple.
The truth is banks don’t want to own these properties, they certainly can’t handle maintaining these homes, and they just end up laying waste to neighborhoods by hanging on to them.
It’s just better for banks to sell the home and get a new buyer inside, rather than engage in a legal battle with a homeowner over whether they even have the right to foreclose in the first place!
And it’s better for homeowners who want to walk away from their homes, because they can do so legally, and leave the threat of foreclosure behind for good. It’s simple logic, yet it took the banks eons to come to this conclusion.
At Oppenheim Law we’ve saved homeowners over 22 million dollars in deficiencies. Homeowners are able to walk away from their obligations without any lingering repercussions of a deficiency judgement chasing them around for 20 years.
The bottom line it’s just sound business sense for banks, and its the best way to legally walk away from your underwater mortgage.
From The Trenches