The number of short sales has shot through the roof in 2012, and if things continue the way they are going – as expected – we could see a new record set by the end of the year.
A new report from RealtyTrac, published in CCN Money, explains that banks are now seeing short sales as a far more attractive option when it comes to their defaulting homeowner clients, as the costs of filing a foreclosure begins to add up.
Not only are banks pushing short sales ahead of foreclosures these days, but they are also trying to speed up the approval process of these. Up until now, short sales have often been viewed as being lengthy and drawn out when compared to foreclosures.
RealtyTrac reports that short sales have jumped by 33% over the last 12 months up until January 2012. Altogether, thirty two states saw short sales grow year-on-year.
Meanwhile, January housing data from Lender Processing Services Inc., shows that short sales made up 23.9% of all housing sales during that month – foreclosures in the meantime made up just 19.7% of transactions. This is the first time that the number of short sales has exceeded that of foreclosures.
Daren Blomquist, Vice President at RealtyTrac, said “We believe that 2012 could be a record year for short sales.”
Incidences of short sales are set to increase even more this summer as the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, outlined new guidelines in order to speed up the short sale process. Under the new guidelines, which come into effect on June 1, mortgage servicers will now have just 30 days to respond to a short sale request. In addition, mortgage servicers will have to make a final decision regarding any short sale offer in just 60 days.