HOUSING STATS JULY 2011

July 2011 has seen some improvements over last July!  Closed listings are up 30% and Pending listings are up 24%!  Average days on the market is only 60 days.  Since 2007 it's stayed between 51 & 56. For additional stats and trends click here.

SHORT SALES: Buyers & Sellers Find Process Frustrating

Short sales are among the most arduous real estate transactions, often taking six months or more to close -- if they get done at all.

They can be a life raft for distressed homeowners who owe more on their houses than what they're worth, but the experience depends on a variety of factors, such as the number of lenders involved and whether there's a hardship, mortgage insurance attached or whether the buyer has the patience to stay with the process. A short sale occurs when a lender agrees to accept less than what the homeowner owes. The transaction requires that the homeowner has a financial hardship.

 

Homes with more than one mortgage and mortgage insurance tend to take the longest. A growing reason short sale deals fall through or take longer is because of mortgage insurance purchased after the homeowner closes on the deal and the loan is later sold to other lenders and investors. Often, the bank holding the first mortgage isn't made aware that the second mortgage had been insured until the end of the process, even if both loans are with the same lender. If the mortgage insurance company doesn't sign off on the deal, the process starts over again.

 

These kinds of delays mean buyers walk away because of the time and frustration involved.

 

Pitfalls Abound

The federal government's program to streamline short sales -- know as the Home Affordable Foreclosure Alternatives Program -- has yet to gain traction because it doesn't allow the lender to collect on the home's deficiency.

Many Realtors avoid short sales because they can be so difficult, including Michelle Chappell, an agent with Real Living John Burt Realty in Oxford. She sold a home this spring that took eight months to complete. "This was the last one I sold. I said no more. I won't do it," she said. "They are just heart-wrenching for these buyers." Chappell said the buyers looked at 80 houses before seeing "the one. Whatever bad could happen in this deal, happened," Chappell said. "I don't see any change in short sales. I don't understand that. There should be some kind of general process that everyone goes through. It just differs from bank to bank. It's almost as if they are throwing curves in there."

To read the full USA Today story by Greta Guest, click here.