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Short Sales to Lower Bank, Government and FNMA Foreclosures Inventory

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By : John Cutts    99 or more times read
A U.S. government effort is expected to impact the housing market of Tennessee and the rest of the country in a big way. The latest program aims to lower the inventory levels of all types of foreclosed properties, including FNMA foreclosures and bank foreclosures, by shortening the process of short sales, thereby encouraging homeowners to sell their properties prior to getting foreclosed.

According to local real estate market analysts, the Home Affordable Foreclosure Alternatives Program will help sell off thousands of foreclosed homes for sale in Nashville, TN and in other parts of the state, but it could also lower the values of residential properties in the process.

The program is expected to work through the vast inventories of foreclosed homes in Tennessee and is projected to represent over 40% of home sales in the area by the start of 2011. Short sales have become the preferred alternative to foreclosure in most parts of the U.S. as they generally offer a better chance for lenders to get a higher price for properties compared with foreclosures.

However, the short sale process has always been criticized for being complicated and time-consuming; two factors that often lead to homeowners letting their properties get under bank and FNMA foreclosures rather than plow through the long process of short sales. Now, the federal government is making this process shorter and easier for both sellers and buyers.

Under the new program, real estate foreclosure homes for sale that qualify for short sales and whose owners are willing to go through the process will be provided with incentives, along with the agents involved in the sale. For real property agents involved in the short sale, full commissions will be provided, while stipends that could be as much as $3,000 will be given to homeowners for relocation expenses.

In addition, lenders who agree to participate in a short sale will be required to drop any delinquency judgment planned for the borrowers or homeowners. According to local market analysts, this latest federal initiative can help lower the number of bank, government and FNMA foreclosures but could also cause residential values to decline.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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