Short Sales are Increasing
More than two years into the housing crisis, lenders are beginning to allow more troubled homeowners to unload their homes for less than they owe. The practice, known as a short sale, is gaining popularity as an alternative to foreclosure, but it remains a difficult and lengthy task to pull off because the lender bears the brunt of the loss.
The number of short sales completed jumped 208 percent during the first quarter of this year compared with the same period in 2008, according to a report issued last month by the Office of Thrift Supervision and the Office of the Comptroller of the Currency, which regulate banks.
Short sales could increase further as home prices continue to fall, leaving a growing number of borrowers owing more than their home is worth. Also, the Obama administration is implementing a program to pay lenders to accept less than the balance owed by the borrower in such deals. …
Before attempting a short sale, borrowers should weigh the potential tax liability and prepare for the usual hassles of a sale — cleaning for open houses and negotiating with bidders — even though they won’t reap the usual cash payoff, real estate agents and lenders said. A real estate agent experienced with short sales can be helpful, they said, but borrowers should also prepare to provide documentation of a hardship that would persuade their lender to accept less than owed.
From The Washington Post
Tags: Real Estate, Sellers, Selling a Home, Short Sales
