The Future of Short Sales in Phoenix

In these tough economic times we have seen lots of good people who are struggling to make their payments and keep their homes.  Recently I attended a seminar that talked about the future of short sales in the Arizona market.  It was headed by a panel that included executives from Wells Fargo, Bank of America, Chase and some other well-known people from the financial industry.  The long and the short of it is that short sales are not going away anytime soon.  One of the panel members made the comment that he sees the numbers rising not decreasing in the near future.  We were assured that while there is noshadow inventory” in the Phoenix future, there will be lots of short sales that will continue to affect the market locally.  Another panel member reminded us that a short sale transaction is a settlement of debt, not a relief of debt.  Basically he was saying that lenders are not in the habit or will they be in the habit of approving a short sale if the sellers do not have a true hardship causing them to no longer be able to afford the house.  “Strategic default” was brought up and the bank execs all agreed flat-out, do not submit them because they will not be approved. If you are not familiar with the term strategic default it means that the seller wants to sell because they no longer want to pay on a home that is worth substantially less than what they owe.  This is not what the short sale was intended for and banks made it clear they do not and will not work with these home owners.  One other point that was brought up was that the IRS has recently hired 20,000 new agents and they are going to be primarily be investigating mortgage fraud and the strategic default process.

As for real estate agents, we were encouraged to hear that the banks have stream-lined their short sale process and in many cases are even able to aid the seller in getting out of the home and relocating into a new home but offering a little $$$.  The HAFA and HAMP programs are there and can be a great help for those who qualify.  There are some great articles out there that explain the options to home owners that are in trouble.  One website I highly endorse is shortsalehelp.org  I urge all home owners and agents who work with short sales to educate yourself on the process and keep up to date.  The short sale market is changing rapidly and by the time you read this I am sure that some of the rules have changed.

As with any legal and financial dealings I highly recommend that you not only speak to a reputable real estate attorney but also talk to a CPA that you trust to find out what your financial implications may be.   While we are in an anti-deficiency state here in AZ, you still may have financial implications.  Real estate agents are great to help you market and sell your home but we are not legal or financial experts and should not be relied upon for that purpose.

Below are some links to lending institution web sites that may be helpful if you have a loan with one of them and are looking for answers:

Bank of America

Wells Fargo

Chase

Advertisements

There are no comments on this post.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: