Friday, May 15, 2009
Help Coming On Short Sale Woes?
The purpose of the Foreclosure Alternatives Program is to streamline the Short Sale process by providing a standardized process flow, establishing minimum performance time frames and standard documentation, and offering incentives to both sellers and lenders to persue a Short Sale as an alternative to foreclosure. Other issues tackled by the program will include standards for establishing the value of the home to be sold, minimum time allowed to market the home for sale before a foreclosure can be completed, standards for fees and commissions, and more. There's more in the fact sheet here.
It's too early to tell whether this program will help provide needed standardization to a long and complex process. There is always a danger with government intervention that the program will have unintended consequences and do more harm than good, but most of the stated goals of the program would be a much needed improvement over the status quo.
(Cross posted at www.leslieeskildsen.com)
Monday, May 11, 2009
Has the OC Housing Market Bottomed Out?
There are still plenty of concerns in the market, with homes priced over $500,000 selling slowly, and short sales accounting for about 30% of the homes on the market. One interesting wrinkle is that bank owned homes have become a scarce commodity. Just a few months ago bank owned properties also made up about a third of the transactions, but today only represent 5% of the homes for sale. REOs, especially in the lower price ranges, are in huge demand because of the relative simplicity of the transaction compared to a short sale, and the market is hot. Most bank owned homes are selling within a few days or weeks, and often at full price or higher. The Wall Street Journal has even dared to use the term "bidding war"!
There has been talk for months about a so-called moratorium on foreclosures related to the Federal financial bailout, TARP, and consolidation of banks, with speculation that it would soon end. This, of course, could lead to a new round of foreclosures and another influx of REO inventory on the market. That might lead to more downward price pressure, but it also might signal the final phase of a long and painful process.