In the coming year, it is expected that there will be more short sale listings than before along with a higher probability of those short sales actually reaching settlement. Lenders are steadily reducing the roadblocks that cause delays and failed closings. Agents and homebuyers are given more certainty and confidence that transactions will work out in the end. Sellers are given more options and more responsiveness from the lenders.
It is also expected that for some short sale sellers, they may have to submit less paperwork than in the past. Lenders may make faster decisions with less information.
More and more people who are current on their mortgage but still struggling financially will be considered for short sales. Many Americans have a few months’ worth of savings, yet they need to sell their house and cannot make up the shortfall on the mortgage. So a short sale is their best option. Fewer people have to deliberately stop paying their mortgage to be considered for a short sale. This change will produce a deluge of short sale listings, as the pool of potential short sale sellers has increased in size.
The short sale industry has more third party companies and law firms that specialize in short sale negotiation on behalf of sellers. Streamlined procedures and high levels of experience at these firms benefit sellers, as they are more likely to be well represented and reach a successful conclusion. Expect to see a small handful of third party companies and law firms capture a large portion of the market as they increase their ability to help struggling homeowners.
Bank of America will continue to outsource some short sale negotiation to subcontractors. Note that these subcontractor companies work for Bank of America and not as advocates for the borrower. It is an important distinction for borrowers who work with a third party company to know if that company works for them or for the bank. In many cases, the seller can hire a third party company to represent them, and that company will negotiate with the subcontractor hired by Bank of America. Expect other major banks to follow Bank of America’s lead by hiring subcontractors.
For someone considering a short sale or other alternative to foreclosure, now is the best time ever to move forward with one of those options. The industry is changing, and more help is available. Feel free to contact us for a no-cost, confidential discussion about your options.