The Skinny on Palm Coast Short Sales

Florida is leading the country in Lis Pendens ('Pending Forclosure') properties. I am a real estate Buyer's Agent, so I am up to my ears it this subject.  I read a post this morning in the Active Rain newsletter.  It was  by Pacita Dimacali, a real estate agent in Almeda California and loaded with links to good information. 

If you or a friend are about to lose your home...or are loaded and want to buy a vacation or retirement home.  The market here has really heated up.  Prices are not moving up, but the snowbirds have arrived and are house shopping here in Palm Coast.

Here's a summary of Pacita's article.  (I have heavily edited it)  Send me a comment; because selling or buying, you are going to need help!

SHOCK! Lenders make more money on foreclosures than short sales!?

Lenders make more money on foreclosures than from short sales or loan modifications. That's what Steve Harney conveyed in a seminar. He caused an earthquake in San Francisco

When loan modifications are turned down, the next thing we attempt is a short sale. And we know that lenders turn over the short sale accounts to loan servicing companies who make our lives hell getting short sales approved. As such, we should know that these loan servicing companies make MORE money by letting the properties foreclose than to approve the short sales OR the loan modification.

RUMBLE...GRUMBLE...CRIES OF DISMAY!

Did he just confirm what we were afraid of?

So I researched this topic and found a few articles worth reviewing. How did I miss these? Was I under a rock in a desert?

CONSUMERLAW.ORG REPORT ON "Why Servicers Foreclose when They Should Modify And Other Puzzles of Servicer Behavior"

http://www.consumerlaw.org/issues/mortgage_servicing/content/Servicer-Report1009.pdf

DAILY PRESS headline. Oct, 30 2009. Do Mortgage Lenders Make More Money when a Loan Goes into Foreclosure?

http://www.dailypress.com/classified/realestate/sns-200910231552tmsrealestmctnig-a20091030oct30,0,6040410.story

HUFFINGTON POST. Oct. 21, 2009, Foreclosures Are More Profitable Than Loan Modifications, According To New Report

http://www.huffingtonpost.com/2009/10/21/perverse-incentives-lead_n_328378.html

Washington Post. July 28, 2009. Foreclosures Are Often In Lenders' Best Interest. Numbers Work Against Government Efforts to Help Homeowners.

http://www.washingtonpost.com/wp-dyn/content/article/2009/07/27/AR2009072703065.html

ThinkGlink. October 21, 2009. Loan Modification Help: Why Lenders Are Slow To Provide Loan Modifications

http://www.thinkglink.com/article/2009/10/21/loan-modification-help-why-lenders-are-slow-to-provide-loan-modifications



Dayton Daily News. Oct. 17, 2009. Drop in foreclosures called "very scary".
They think properties are not worth pursuing.

http://www.daytondailynews.com/news/dayton-news/drop-in-foreclosures-called-very-scary-352689.htmlw

FLASHBACK: Huffington Post, June 8, 2009. Short Sales: Banks Blocking Way Out of Foreclosure Crisis

FLASHBACK: Huffington Post, May 15, 2009. Short Sales Stories. Lenders tend to stick with more familiar foreclosure process, losing money for everybody.

UPDATE: Huffington Post, November 2, 2009. Homeowners: "Hey Congress, Get Off Your A**"

So are we engaging in self-flagellation helping our distressed clients with their short sales and loan modification? Are lenders really more likely to foreclose? Are the short sale servicing companies really trying to help? Or are they stalling and withholding their help because they know their leaders would rather have the property burn into foreclosure?

Is there no resolution in signt? There oughta be a law!