The numbers of foreclosures across the U.S. are down. However, the rates of foreclosure in Florida are actually rising, as discussed in a recent post. Interestingly, the trend seems to include a rise in the number of short sales in recent months.
Since July, the number of short sales taking place in Florida has actually exceeded the number of foreclosures. Just nine months ago a moratorium kept banks from performing home seizures after allegations of improper documentation and forged paperwork.
This past January, short sales accounted for 23.9 percent of home purchases, compared with 19.7 percent for sales of foreclosed homes, according to data compiled by a Jacksonville, Florida-based company. These numbers are up from 16.3 percent of short sale transactions a year earlier and 24.9 percent of foreclosures.
Because short-sales can take months longer than conventional home sales, the Federal Housing Finance Agency has implemented an expedited process. The new process gives loan servicers 30 days to respond to all short-sale offers and a 60 day limit to approve or reject offers.
The FHFA oversees mortgage companies Fannie Mae and Freddie Mac, agencies that completed 125,456 short sales last year alone.
In addition to changes made by banks that speed up the short-sale approval process, there is less paperwork and it’s easier for homeowners to prove hardship. In addition, some banks have offered cash incentives to homeowners who agree to a short sale as a way of speeding up the process.
For homeowners who are unable to make mortgage payments and may be facing foreclosure, or may be wondering if a short-sale is an option, it would be wise to speak with an experienced attorney who can inform you of your options and help you through the process.
Source: Bloomberg, “Short Sales Surpass Foreclosures as Banks Agree to Deals,” John Gittelsohn, April 17, 2012
