Philadelphia Home Auctions Avoided Through Short Sales- By: John Cutts
Philadelphia home auctions are being avoided by a number of homeowners through short sales, according to Greater Philadelphia real estate professionals.
In January, 6.9 percent of all houses for sale in the area as of the last week of January were for short sale transactions, according to top real estate executive Art Herling. If these units were all sold, it meant the same percentage of houses was saved from entering listings of foreclosed homes in Philadelphia.
Nationwide, 14 percent of all sales transactions involving previously-owned homes as of the last week of January were short sale deals, according to the National Association of Realtors.
Despite the rigorous work and longer time needed to carry out short sales, these have significant impact on overall foreclosure figures, in addition to helping homeowners contain the damage of the housing crisis on their credit records.
Recently, the administration of President Barack Obama relaunched its short sale program with additional incentives for homeowners. Its Home Affordable Modification and Refinancing Programs have been largely ineffective in containing the foreclosure crisis, so it has revisited its short sale program and enhanced it to be more attractive and viable for distressed homeowners.
In 2009, foreclosure postings in the Philadelphia metro area, including pre foreclosures in Philadelphia, surpassed 31,000 units, marking an almost 15-percent increase from distressed filings in 2008. For every 77 houses in the region, one unit was in danger of entering Philadelphia home auctions in 2009.
As envisioned by federal officials, the enhanced short sale program is expected to reduce the number of housing units entering public auctions. Among the features added to the 2009 program are the incentives for homeowners and second lien holders and the standardization of paper work.
Under the program, a borrower can get $1,500 in relocation assistance and the lender can get $1,000. The second lien holder can get $3,000 from the proceeds of the sale. To encourage real estate brokers to work out short sales, the program specified that lenders cannot reduce their commission rates.
Currently, according to realtors, short sales comprise only a small portion of the housing market nationally and regionally because of the difficulty of processing short sales. Short sale buyers tend to give up pursuing properties in short sales and look for other units because of the uncertainties.
Nevertheless, despite the hindrances, the short sale program offered by the federal government is still a viable option for preventing a number of houses from entering Philadelphia home auctions.
Article Source :
Author Resource :