Some industry experts are leading the way in helping distressed homeowners avoid the trouble of foreclosures by creating a short sale or pre foreclosures strategy. The strategy is designed to help distressed homeowners sell their properties, an alternative to foreclosures.
Experts said that in this strategy, homeowners may not be able to save their properties but at least they will be spared from the traumatic experience of going through the foreclosure process and at the same time, preserve their creditworthiness.
They said that so far, short sale is slow in helping distressed homeowners because of the difficulty of navigating through the process. The initiative is a way to promote a streamlined short sale or pre foreclosures that will benefit lenders and provide homeowners a way to start all over again.
The initiative will greatly help at-risk homeowners who failed to qualify for mortgage modification. Lenders that offer mortgage modifications to their borrowers who are at risk of losing their homes to foreclosures are invited to join the initiative.
Homeowners who are having difficulty obtaining a mortgage modification or planning to walk away from their properties will receive detailed information on short sale from trained and certified customer service representatives. Homeowners who have decided to go the route of short sale will be given instructions on how to proceed with the process.
Industry experts said that many homeowners who are at-risk of foreclosures are not aware about short sale, let alone that it is a viable alternative to foreclosures. They estimated that millions of at risk homeowners may benefit on the short sale method. Market data showed that the highest foreclosure rates for this year were posted in the third quarter.
Some analysts said that there are about 7 million foreclosed properties in the so-called shadow inventory that are expected to hit the market in the coming months. And only about 50 percent of loan modification applications have become successful, with a large number going into default again.
Industry experts in Colorado believe that the housing market could only gain true recovery if there is a significant reduction in the inventory of distressed properties, and short sales or pre foreclosures offer a practical and viable way to help contain the number of foreclosed houses.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.