Lenders are increasingly becoming more accepting over short sales as they seek more solutions to help struggling home owners avoid foreclosure, according to a recent article at MSNBC.com.
"Foreclosure sales are pretty devastating," Faith Schwartz, executive director of Hope Now, a resource for cash-strapped home owners, told MSNBC.com. "We'd much prefer a [loan] modification, but if [home owners] don't quality, then the next best alternative is deed-in-lieu or short sales."
Short sales and foreclosures increased in 2010, but in 2011, short sales continued to climb even more (increasing 26,000 nationwide) while foreclosures dropped by 255,000, according to Hope Now data.
Banks are realizing that a short sale is far more preferable than a foreclosure in most cases. For one, banks tend to make more money off of a short sale vs. foreclosure: The average price of a foreclosed home in the second quarter of 2011 was $164,217 compared to $192,129 for a short sale. Also, foreclosures tend to be more costlier to a lender in legal and administrative resources too.
Neighborhoods also tend to benefit more from a short sale than a foreclosure because short sales tend to sell for less of a discount and, unlike a foreclosure, they don’t often sit vacant, which can make them prime targets for vandalism and depressing nearby property values, housing experts say.
Source: “Increase in Short Sales Give Market a Little Breathing Room,” MSNBC.com (Dec. 29. 2011)
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