South Florida banks allowing more non-foreclosure short sales
Increasing numbers of banks are approving short sales before homes go into foreclosure in Broward County, according to a recent RealtyTrac survey. As more homeowners are facing foreclosure, more and more lenders are willing to help some people unload their homes before they foreclose. This can be a source of relief to those facing serious financial challenges.
In Broward County, these types of non-foreclosure short sales rose 60 percent from July through September compared with the numbers from last year. A short sale occurs when a lender agrees to allow the homeowner to sell the home for less than what is owed on the mortgage. Traditionally, banks wouldn’t agree to a short sale until the home was already in foreclosure.
Homes that have been foreclosed on are those that have been repossessed and are now owned by the lender, in default on their loans, or scheduled for auction. Because the foreclosure process can take months or even years to fulfill, some banks are willing to speed the process up. A $25 billion national mortgage settlement is also encouraging some lenders to allow more short sales.
There are still a few banks that won’t negotiate a short sale or other arrangements until the mortgage is at least 90 days past due. However, the jump in non-foreclosure short sales may be signaling a new trend. The streamlined time that some banks are working with struggling homeowners may give people more relief options, allow them to work with their lenders toward better resolutions, and even stop foreclosure with the help of an experienced bankruptcy lawyer.
Source: Sun Sentinel, “Non-foreclosure short sales rise across South Florida,” Paul Owers, Dec. 5, 2012