As the summer draws to a close and the holidays quickly approaching, you can expect even more short sales to enter the pipeline with both distressed homeowners and lenders trying to work out an agreement so that both enjoy a win-win situation. Just to remind you – a short sale is considered to be the best foreclosure alternative as it allows the homeowner to leave the home without much repercussion as a result of mortgage default. On the other hand, more and more lenders are accepting short sale proposals especially since their books are already overflowing with foreclosure inventory, which are considered to be non-performing assets.
The timing is certainly right to consider a short sale. Lenders are being pressured by the federal government to work with the owner instead of foreclosing and are more likely willing to negotiate. Sellers are also working double time to have their short sale proposals accepted especially since there is the risk of losing the tax break incentive (Mortgage Forgiveness Debt Relief Act) which is set to expire by the end of the calendar year.