The increasing number of foreclosures in Colorado and across the US has created a change in real estate markets, lending industry offerings, Wall Street practices and has been headline news for weeks now. Foreclosure is a not a positive situation for any party involved, or even those not involved directly. When a person or family can no long pay their mortgage or mortgages, typically because of some other financial hardship (medical problems, lose of job, debt from other sources, etc.), they not only lose their home, but the foreclosure hits their credit report in addition. Banks, financial institutions, and Wall Street buyers in the secondary market suffer huge financial losses. Sellers, not directly involved in the foreclosure, suffer as under-valued inventory floods the market at prices most sellers can't compete with. Short sales are one alternative solution to foreclosure, becoming more popular daily. To read further on foreclosures and their impact on real estate markets visit http://www.movinginboulder.com/links.asp and check out some of the News Source links like Inman News, RIS Media, or Realty Times.
A short sale is often a better option for a homeowner that is behind on their payments, in pre-foreclosure, or even feeling like they may become behind on their payments. Here are some facts about short sales.
What is a short sale? A short sale is an agreement from the lender to accept less than the full amount owed on the property.
Why would a lender be willing to accept less than the full amount that is due on the home? A short sale is better than the foreclosure process in many ways and is seen as the lesser of two evils in the lenders mind because a short sale is a shorter, less costly process than foreclosure.
Which markets have short sales? ALL markets can be affected by short sales.
What are some of the contributing factors and reasons we are currently experiencing such high levels of mortgage default? Some contributing factors include: 1. Lowest consumer savings rates since the Great Depression, 2. aggressive lending practices including interest only loans, 100% financing, 125% financing, ARMs, and sub prime lending, and 3. area economics like the declining real estate markets.
Short sales take persistence, patience, and the knowledge and expertise of a licensed Realtor. If you or someone you know is in default on their mortgage, behind on their payments, or just concerned they will fall behind on payments, read further by visiting http://www.movinginboulder.com/sellers.asp and clicking on "Avoiding Foreclosure - Short Sale Questions Answered! Part 2 or call Rachel at 303.442.4882 or email Rachel@MovingInBoulder.com