Short Sales Don’t Give You A Get Out of Debt Free Card

There are currently millions of homes in the US listed as short sales. With nearly one in every four mortgage borrowers underwater, the amount of short sale homes is at an all time high. This is a real obstacle for potential home buyers and banks who are overwhelmed by the number of short sale files they need to deal with.

The CEO of Bank of America recently spoke to a group of Realtor’s in DC and suggested ways to make short sales go faster. Bank of America has recently hired thousands of new employees to work with their numerous short sale files. Even with the additional work force, it still takes weeks for BOA short sale specialists to return phone calls.

The number of short sale homes for sale would be drastically minimized if people would qualify themselves first. Essentially, there are two different approvals that much take place for each short sale transaction. Short sellers must show the bank that they have no savings and deficient income. They need to demonstrate that they have no real options other than short sale, and that they have experienced a legitimate hardship that caused the situation. These borrowers must have a real and imminent danger of foreclosure. Then once the person is approved, the property needs to be approved for short sales. There are so many homes listed as short sales out there where the person doesn’t qualify. It wastes the banks time, and resources trying to approve short sales where the person doesn’t actually qualify.

Sellers must realize that a short sale doesn’t neccessarily eliminate the debt they once had. They may not be the best decision for people who actually do have means to make payments, or pay to get out of their current mortgage. By avoiding a short sale, some property owners will actually be better off in the long term. In some cases, the banks can seek a deficiency judgement up to seven years after the short sale took place. Short sales are not a free ticket from a declining real estate market.

We need to lower the amount of Arvada Colorado Homes for Sale, Fairfield California Homes for Sale, and Real Estate in Arlington WA, listed as short sales. When this happens, we will ultimately see the turnover time for short sales go down.

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