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Sacramento Foreclosure Listings Curbed by HAMP, Short Sales

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By : John Cutts    99 or more times read
Sacramento foreclosure listings are being curbed by short sale transactions and by the federal Home Affordable Modification Program.

According to a report issued by the Treasury Department, a total of 2,921 mortgages in the four-county Sacramento area have been put into permanent loan modification as of March. The area covers the counties of Sacramento, Yolo, Placer and El Dorado.

The Sacramento modifications represent 8.3 percent of all permanent loan modifications worked out in the state of California. On average, the monthly loan payments were lowered by about $515.

All in all, the total number of mortgages in permanent and in trial modifications in the Sacramento area as of March was 15,371.

In the Los Angeles region, which includes the foreclosure-clobbered Inland Empire, a total of 9,414 permanent loan modifications were worked out.

Statewide, a total of 35,379 mortgages were put into permanent modification as of March. In February, lenders reported that they have completed 52,905 permanent mortgage modifications, an increase from the 52,205 mortgages modified permanently in January.

Another scheme that has effectively made a dent on foreclosure listings in Sacramento is the short sale transaction. According to records from the Sacramento Association of Realtors, almost one in four home sales in January was a short sale, indicating the increased willingness of banks to accept short sales if offered at the right price.

The relatively high proportion of short sales in Sacramento is expected to jump up further when distressed homeowners participate in the enhanced short sale program relaunched by the Obama administration. The enhanced scheme now offers incentives to borrowers and second lien holders, unlike before when it was only the lender or servicer that was being encouraged with financial incentives.

For homeowners, the one major advantage of short sales over foreclosures is the protection of their credit scores. Certainly, short sales also lower credit scores, but not to the extent of damage resulting from foreclosures.

Short sales are better carried out by real estate professionals who took additional classes for distressed sales management. These professionals know what lenders are looking for in viable short sales and know how to facilitate the process so buyers and sellers do not have to wait in uncertainty for a long time.

The pace of Sacramento foreclosure listings surged in 2009, following the statewide trend. Together with filings in other parts of the Sacramento area, almost 48,000 postings were filed, representing 5.64 percent of all housing units in the Sacramento-Roseville-Arcade-Arden metro area.

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