There doesn’t seem to be an end to foreclosures in our near future, even here in Florida. The rates fluctuate from quarter to quarter, but the houses keep coming! Lately, I hear a lot of stories of Florida residents owing twice what houses are selling for in their neighborhood. A lot of people choose to let their house go back to the bank, even if they can afford it. Although most people I talk to agree there will be a continuous saturation of foreclosures in the Tampa market for the next 2 years, I think it’s interesting that Florida wholesale prices have been steady the past several months.
Helping to hold the Florida prices steady is the foreclosure process. Florida courthouses are backed up for 12 months in some cases and lenders getting ownership of a property through foreclosure is no longer a fast process.
The slow foreclosure process is one reasons why lenders are now agreeing to short sales at lightning speed compared to two years ago. A short sale provides the lender a quick out of their problem loan, and gives them fast cash. Sure, the money they get from a short sale is often half what they originally lent out, but compared to a loan that they are not being paid on, it’s a good option!
Years ago, when a property owner, a realtor, or a short sale “expert” called a lender in attempt to negotiate a price reduction, it was a maze of voice mail and email messages. Now when you call a lender, you’re likely to easily get in touch with the Loss Mitigation department on your first try. Lenders have people trained to help get these negative assets off their balance sheet. It is a good idea to research your bank prior to negotiating a short because each lender has it’s own policies for qualifying for them to take a loss on a loan. You will be able to submit information in a way that appeals to the lender, and may get an approval faster!