US Government To Provide Short Sales Incentives

I have completed a lot of short sales of Daytona Beach homes and condos over the past two years. I expect more sellers will be taking advantage of short sales with the latest government plan to provide payouts for short sales.

Who Will Get Short Sale Money?

According to Travis Hamel Olson, COO of the Loan Relief Corporation, both the primary and secondary lender and the seller of the distressed property will receive payments.

The New Short Sale Process

The primary lender will get up to $1,000, the second mortgage holder will get $3,000 and the seller with get up to a $1,500 relocation allocation.

To qualify for this program, the homeowner needs to apply for the Home Affordable Modification Program (HAMP) to attempt to modify their loan. Once the homeowner is rejected, they are eligible for the government short sale program.

Who Benefits?

The push for the program is coming from the current Administration, the Treasury Department and Fannie Mae and Freddie Mac. They believe that it is less expensive to do a short sale rather than a foreclosure. It’s probably a more politically palatable that more and more foreclosures.

From the perspective of buyers and sellers, the seller benefits from getting out from under the loan without the more negative impact of a foreclosure on their credit scores. However a short sale does affect your credit score. The buyer can benefit from a home that sells well under the average market value. In other words, buyers can get a bargain, but it’s not guaranteed. Buyers need to be careful that the final price that’s settled upon includes all costs and that they are purchasing a property that is truly below market value. They should also have an attorney review the bank offer if there is any uncertainty at all.

Will It Work?

It could. The HAMP program has been a general failure. Of over 1,000,000 invitations from lenders to modify mortgages under the program, only 31,382 mortgage modifications have been made permanent. This new program seems to mesh with what a lot of lenders are doing, but when the government gets involved, there are no certainties.

I hope it works. If you have any questions on Daytona Beach short sales, feel free to contact me.

What You Must Know If You Are Planning to Buy A Home Now

55% of Florida home sales in September were REO (real estate owned) and short sales according to Lender Processing Services (LPS). As a home buyer, the Daytona Beach condos and homes you will be searching for and seeing will be in financial distress over 50% of the time.

There is even a greater chance that the home or condo you make an offer on will be in foreclosure or a short sale because this is where the best prices will be found. That means to be well prepared, you need to know more about Daytona Beach short sales and foreclosures. More information can be found on our sites through the following links:

Daytona Beach REO Properties
Includes and explanation on REO properties and how you can benefit

Daytona Beach Shore Sales
This page will give you links to videos and other articles on short sales for both buyers and sellers.

There are different perspectives on short sales and foreclosures. An article from Public Radio -Home-selling’s short sale headaches gives a perspective from the sellers side of the problem, but also talks about making offers on short sales properties. It’s worth a read.

The gist of the article from our view is that if you are in the market to buy a home or condo, you need two things:

1. As much knowledge as you can get about the process,
2. Experienced guidance in selling or buying distressed properties.

Check around our site or search on REO, short sales, and distressed property through your favorite search engine to learn more. As far as guidance is concerned, please make sure you real estate agent has extensive actual experience in short sales and foreclosures. In this market, it is critical. In Daytona Beach, Ormond Beach, Port Orange, Palm Coast and the surrounding communities, I can help. I’ve closed over 22 deals this year and most of those have been short sales and foreclosures. I know the process, both from the listing and selling side. Call me with your questions at 386-566-7503.

New Survey Gives Banks Low Marks for Short Sale Process

Arthur Delaney at huffingtonpost.com, wrote an article titled Short Sales: How Everybody Loses From Banks’ Opposition. The article cites a survey conducted by Campbell Communications that may be of interest to you.

Interesting Short Sale Facts

• 77% of Short Sale sales fail because of the sluggishness of banks to respond
• 8 weeks – the average time it takes for a bank to respond with a yes or no for a short sale
• 11 days – the average time it takes for a bank to respond with a yes or no for a foreclosure
• 19% – the average loss a bank experiences from a short sale
• 40% – the average loss a bank experiences from a foreclosure
• 37% – the percentage of buyers who get frustrated and walk away from short sales because of bank response time.

Patience, Patience, Patience

Short sales require patience. I’ve completed many successful short sales for clients and none of them have been quick. However, if you have the patience, and make a calculated and reasonable offer, you can get a significant bargain.

More resources are available at Daytona Beach Short Sales, Daytona Beach Foreclosures, and Daytona Beach Real Estate.

You can always call me at 386-566-7503 for more information on short sales and the short sale process.