Northern California real estate agents are seeing increased cooperation from the banks with regard to Short Sales. Realtor David Allen Rivas out of the Century 21 M&M Sunnyvale office says, “I am finding that banks are actually postponing the sales date and allowing short sales to close instead of following through with foreclosure.”
“Here in the Bay Area, home equities did not get hit as hard as in other areas, and oftentimes homeowners are only upside down $40,000 to $50,000. Even so, I am seeing the larger banks allow short sales to close instead of going forward with foreclosure,” says David.
The last couple of years have been especially difficult for Realtors in Northern California. The banks have been holding on to the REO foreclosures and short sales have been hard to close.
Banks often resist such sales because they are difficult to execute, particularly when multiple creditors and other parties are involved. In additions, short sales lock in losses for the lender that might be reduced if the sale is delayed until the market improves.
Foreclosures on the other hand, continue to drive down housing values with prices in 20 major United States cities down an average of 3.1% in January compare to the same month a year ago.
Last October 2010, three of the major banks declared a ‘foreclosure freeze’ for about a month due to the paperwork problems brought to the publics attention including – robo-signing – the practice of bank employees signing sworn documents without reading or understanding them.
On Wednesday, March 30, 2011, a face-to-face meeting regarding those same foreclosure paperwork problems took place in Washington between the attorneys general from all 50 states, along with other federal agencies, and, representatives from five banks; Bank of America Corp, JP-Morgan Chase and Co, Wells Fargo & Co., Citigroup Inc and Ally Financial Inc.
In this meeting the banks were presented with 27 pages of demands calling for sweeping changes to mortgage servicing, including how homeowners are treated when they try to modify their loans.
The general consensus from government officials is that the major banks may be forced to let distressed homeowners sell their homes through the process of short sale as part of the broad settlement. This requirement would be in addition to forcing mortgage companies to work with homeowners on loan modifications.
The goal of short sales would be twofold: to provide a quicker and more economical way for banks to dispose of distressed real estate and to help stabilize the real estate market by clearing out a backlog of defaulted mortgages that are poised for foreclosure.
Century 21 M&M Realtors and trained and ready to assist if you find yourself forced to sell your home through the process of short sale. Contact a Century 21 M&M Real Estate Associate today at (800) 350-1548.
*** “Deal would force banks to allow short sales” by Jim Puzzanghera and Alejandro Lazo, Modesto Bee, April 1, 2011