why Short Sales are getting more difficult in Phoenix

May 28, 2008

for sale signA Short-Sale means asking your lender to accept less than the amount owed loan payoff in order to quickly sell your home, instead of the bank foreclosing on your home; saving them time and ultimately money.

To learn more, read Jillayne Schlicke’s article on short sales ; It is very informative.

For those who want to know more about how the short-sale process works, David C. Winton, a well respected attorney who writes the Bay Area Real Estate Blog references an excellent article from Philadelphia’s newspaper , “The Bulletin” about Understanding Short Sales.

Mr. Winton points out (I think quite accurately) that “instead of getting easier, short sales seem to be getting more difficult to get done”.

In fact, Bill Gordon, TMG West has found that some lenders have suspended short sales and “points out that “Countrywide has restricted the review process until the last few days before the foreclosure sale”

These are 3 main problems why Short-Sales are getting more difficult.

  1. Most solutions, such as Forbearance, Deed-in-lieu of foreclosure and short-sales require lender approval and negotiations. However, as David and Bill point out, many lenders are shutting down the lines of communication.
  2. As Lynn Frantzen points out in “Short Sales and mortgage insurance” , If a lender has mortgage insurance such as PMI , (Private Mortgage Insurance) they can collect money on insured loans if the home is foreclosed upon.
  3. Finally, Mortgage insurance companies and Lenders , in a sense, denying short sales by aggressively insisting that the deficient monies be paid back. Read Brain Brady’s Guide to the effect of mortgage insurance on short sales.

There are a number of factors to consider if you get that ugly little Foreclosure Notice and before you attempt a short sale.

Especially here in Phoenix, Arizona where Deeds of Trust change the landscape a bit.

Here’s what you should do 1st.

Contact your lender before or as soon as the potential foreclosure problem arises. You can do little to help you out of the situation without speaking with your lender.

You may be surprised to find out that your bank may be willing and able to help you towards an amicable solution.

——————————————————————————–

Copyright © 2008 By James Wexler, All Rights Reserved. *why Short Sales are getting more difficult in Phoenix*

Contact James Wexler (480) 221-8080 for all your Phoenix Scottsdale area Real Estate needs.

Related Posts

Written by James Wexler · Filed Under Articles, Lending / mortgages, Sellers, Short-sales / Foreclosures 

Comments

Got something to say?