Underwater homeowners have been seeking short sale options but there are many in the housing industry who feel that these types of sales have been difficult to close, despite the fact that more homeowners are seeing decreases in property values, which for some is a difficult predicament, but has offered low-cost options for homebuyers when coupled with low mortgage interest rates that are currently available. Yet, there have been reports over the past months and late in 2010 which stated that 2011 may offer more opportunities for homeowners to short sell their mortgage as servicers are being pressed to help homeowners find buyers for these distressed properties rather than forcing homeowners to market their home and find a buyer before approaching their bank for the possibility of a short sale.
Some good news has come in the form of a report stating that California is seeing success in short sell participation. Housingwire.com stated that, “The California Association of Realtors is reporting that 94% of its members participated in a short sale in 2010,” but there are those who feel many issues in the short sale procedure need to be addressed and repaired if the maximum number of homeowners that could benefit from one of these sales will be able to take advantage of this alternative to foreclosure.
Obviously, short sale opportunities are not simply being looked for in California, but other hard-hit areas like Nevada, Arizona, in Florida, just to name a few, are experiencing situations where home prices have drastically dipped and left many owing a substantial amount more on their home than it’s actually worth. While short sale and deed in lieu of foreclosure programs are being offered from the Making Home Affordable Program’s Foreclosure Alternatives option, there are still homeowners who are struggling to get these sales approved by their servicer, and even some homeowners have seen problems where they were denied a short sale despite having a buyer.
However, there are some indications that major servicers may be more willing to offer short sales as a way to simply get new homeowners into a property, as the inventory of homes in the housing market which are sitting empty and has been on the rise in many areas. Sadly, low home prices and mortgage rates have not helped to make much of a dent in the backlog of foreclosed homes, which has many concerned that even where a short sale may be possible, buyers may be scarce.
While there were programs implemented in the past, similar to the deed in lieu of foreclosure plan, which have allowed some homeowners to remain in their home but become renters for a period of time, there are still concerns that homeowners who are in a negative equity situation may have a tough road in some areas when it comes to finding a short sale opportunity. Hopefully, more servicers can be of aid to these homeowners who are looking to sell their underwater property, but the question of whether buyers will be available for the number of homes that may be suffering from negative equity remains to be seen.