Editorial

Front Page - Friday, November 26, 2010

Real Estate Facts

A better alternative

Elwynn Schwartz

Due to recent government incentives, short sales are becoming the darling of the distressed-property marketplace. A short sale keeps owners out of foreclosure, because the lenders allow the homeowners to sell their house for less than they owe.
Banks have really sped up the process, hiring large numbers to serve the short sale specialty. In early 2010, one of the very largest banks had more than doubled the number of short sales it approved, sometimes as quickly as 24 days.
Compare that to last year, when short sales stalled indefinitely or took more than six months to complete.
The biggest roadblock to approval was often a second mortgage held by the seller. Since the primary lender must be paid first, the second lien holder could be left with nothing and they would basically kill the sale.
But now the Home Affordable Foreclosure Alter-
natives (HAFA) program provides money to primary lenders who share the proceeds with the second lien holders. HAFA also provides up to $6,000 to those secondary lenders if they release their claim.
Short sales keep borrowers out of foreclosure and reduce the impact on their credit. While foreclosure can shave 200 points off your score, the penalty for a short sale is only half of that. Hopefully, a boom in short sales will also bring us closer to ending the ongoing foreclosure crisis.
Elwynn Schwartz is the owner of Chattanooga Real Estate Consultants and may be reached at 423-894-3050.

Search Hamilton County property sales, mortgages, court filings, incorporation filings, liens & more INSTANTLY.

View official public notices.

Home | Public Notices | All Statewide Public Notices | Name & Property Search | Site Login