Short sales of U.S. homes rose to a three-year high in the first quarter as banks agreed to let more borrowers unload property at a loss, putting the transactions on pace to surpass deals for foreclosures, RealtyTrac Inc. said.
According to RealtyTrac’s Daren Blomquist,
“By next quarter nationwide, we’re actually going to see the number of pre-foreclosure sales outnumbering bank-owned sales,”
“It’s a paradigm shift in the way lenders are dealing with their distressed loans.”
RealtyTrac Chief Executive Officer Brandon Moore
“Lenders are approving more aggressively priced short sales, which in turn is resulting in more successful short-sale transactions”
“…..we’ll see more like 700,000 to 800,000 properties repossessed by banks and an increase in short sales,”
“In effect, homeowners are still losing their homes, but they’re doing it in a more palatable way for them as well as for the market.”
Just the facts:
* Sales of homes in the pre-foreclosure process (short sales) increased to 109,521.
* up 25 percent from a year earlier and the most since the first three months of 2009.
* The number of bank-owned homes sold during the quarter fell 15 percent from a year earlier to 123,778.
* Pre-foreclosure homes, or those that had received a default or auction notice, sold for an average $175,461 in the first quarter,
* Average discount of 21 percent compared with properties not in foreclosure. ( The average discount was 16 percent a year earlier.)
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* Foreclosed homes sold for an average of $147,995 or a 33% discount when compared to normal non-distressed equity sales.
* According to NAR the median price of an existing home was $177,400..thats an INCREASE from $164,800.
* HAFA, loan servicers receive as much as $2,000 for completing a short sale. In March, HAFA increased the maximum settlement for second-lien holders to $8,500 from $6,000 and removed occupancy requirements.
* More than 39,000 short sales were completed under the program through March, according to a May 4 Treasury Department report