Joe Naccarato's Real Estate News You Can Use: Short Sales Picking Up Steam

Monday, October 3, 2011

Short Sales Picking Up Steam

by The KCM Crew on October 3, 2011

The Office of the Comptroller of the Currency released their Second Quarter 2011 Mortgage Metrics Report last week. In the report, they covered the success the banking industry is having in each of several categories regarding the current housing crisis. Here is what they found:

Loan modifications –

These are “actions that contractually change the terms of mortgages with respect to interest rates, maturity, principal, or other terms of the loan.”

Down 18.1% from the first quarter and down 19.5% from last year.

Completed foreclosures –

Where “ownership of properties transferred to servicers or investors. The ultimate result is the loss of borrowers’ homes because of nonpayment.”

Up 1.2% from the first quarter but down 30.7% from last year.

Newly initiated foreclosures –

“Mortgages for which the servicers initiate formal foreclosure proceedings during the month. Many newly initiated foreclosures do not result in the loss of borrowers’ homes because servicers simultaneously pursue other loss mitigation actions, and borrowers may act to return their mortgages to current and performing status.”

Down 8% from the first quarter and down 1.7% from last year.

Short sales –

“Sales of the mortgaged properties at prices that net less than the total amount due on the mortgages. Servicers and borrowers negotiate repayment programs, forbearance, or forgiveness for any remaining deficiency on the debt. Short sales typically have a less adverse impact than foreclosures on borrowers’ credit records.”

Up 12.6% from the first quarter and up 1.7% from last year.