Marshall Carrasco Reno's #1 Short Sell Expert www.renohelp.org. Here are headlines, quotes, and statistics from large publications about the benefits of short sale instead of foreclosing on a property.

1. Short Sales Benefits
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2. Here are headlines, quotes, and statistics from large publications
about the benefits of short sale instead of foreclosing on a
property.
Listed below are some general themes about the positive impact of
short sales.
• Short sales are more efficient than foreclosures,
• Banks paying incentives for owners to short sale their property
• Damage to credit ratings not as bad compared to foreclosure
• Short sales better for the community
• Short sales better for banks
• Short sales homes sell for more than
foreclosed homes
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3. 1 Banks paying homeowners to sell
• Banks are actively encouraging delinquent homeowners to sell their homes
for less than they owe, letting them walk away from the debt.
• What's more, in some cases banks are offering delinquent homeowners cash
-- typically $15,000 to $35,000 -- to do a short sale.
• Bloomberg quotes Bill Fricke, a senior credit officer for Moody's Investors
Service in New York: "Banks are nudging potential sellers [to short sale their
property] by preapproving deals, streamlining the closing process, forgoing
their right to pursue unpaid debt and in some cases providing large cash
incentives."
• Losses for lenders are about 15% lower on the sales than on foreclosures,
which can take years to complete while taxes and legal, maintenance and
other costs accumulate, according to Moody's.
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4. 1 Banks paying homeowners to sell
The (short sale) deals accounted for 33% of financially distressed transactions
in November, up from 24% a year earlier, said CoreLogic Inc., a Santa Ana,
Calif.-based real-estate information company.
• Bank of America ran a pilot program in Florida last autumn, according to
CNNMoney. It paid $10,000 to $20,000 to certain homeowners to sell their
homes. It may be revived and expanded.
• JPMorgan Chase "generally" pays incentives of $10,000 to $35,000 at
settlement for short sales.
• Wells Fargo offers homeowners $10,000 to $20,000 for short sales or deeds
in lieu (where the bank takes the home's title.) But the incentives are only in
some states.
• Citigroup offers qualified borrowers about $3,000, a spokesman told
CNNMoney. "Investor programs have different guidelines for relocation
incentives, which we honor," the representative said by email.
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5. 2 Banks pay delinquent borrowers $35,000 to sell their homes
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6. 2 Banks pay delinquent borrowers $35,000 to sell their homes
• From the bank's point of view, the offers make sense, according to Tom
Kelly, a spokesman for Chase Mortgage, who would not comment on Pierce
or other individual cases. "The first choice is a modification but if that's
impossible than a short sale is a faster, more efficient solution,“ he said.
• Short sales also command higher prices than foreclosed homes.
• In December, foreclosed properties sold for an average of 22% less than
conventional sales, while the discount for short sales was only 14%,
according to the National Association of Realtors.
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7. 3 Short Sale can mean Bonuses for some Homeowners
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8. 3 Short Sale can mean Bonuses for some Homeowners
• Real estate experts said that banks can net bigger proceeds in short sales by
sidestepping the costs, lengthy timeline and uncertain sales prospects of
foreclosures.
• With delinquencies continuing to mount, quick disposition of some homes
makes sense for the banks and for the overall housing market.
• "Banks are taking a renewed eye in the past six months toward short sales,
where they had had more of a jaundiced eye previously," said Stan
Humphries, chief economist at real estate website Zillow.com.
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9. 4 Banks paying Homeowners to Avoid Foreclosures: Mortgages
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10. 4 Banks paying Homeowners to Avoid Foreclosures: Mortgages
• “When a modification is not possible, a short sale produces a better and
faster result for the homeowner, the investor and the community than a
foreclosure,” Short sales represented 9 percent of all U.S. residential
transactions in November, the most recent month for which data is available,
up from 2 percent in January 2008, according to Corelogic.
• Banks also pay a few thousand dollars to the owners of second liens, whose
loans can be wiped out by a short sale, to encourage them not to block the
deals.
• For banks, approving a sale for less than is owned on the home can cut a
year or more off the time it takes to unload a property.
• From listing to sale, the transactions took about 123 days on average at the
end of last year, according to the Campbell/Inside Mortgage Finance
HousingPulse Tracking Survey.
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11. 5 A Solution to the Holding Crisis Could Be at Hand
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12. 5 A Solution to the Holding Crisis Could Be at Hand
• Unclogging the legal and financial system is key to the recovery. The latest
improvement is an upsurge in lenders’ enthusiasm for short sales as an
alternative to foreclosures.
• Short sales are much faster than foreclosures and tend to preserve more of
a home’s value. (People who leave voluntarily are less likely to punch holes
in the walls and steal the copper wiring.)
• “The notion of a short sale runs counter to intuition for a lot of bankers,”
says Bostic. “In a short sale you actually are losing money. What was not
fully appreciated is that a short sale today can actually minimize your
long-term losses.”
• Aside from cash incentives, lenders are also nudging along potential short
sales by pre-approving deals, streamlining the closing process, and forgoing
their right to pursue the unpaid balance of the loan, says Bill Fricke, senior
credit officer at Moody’s Investors Service (MCO) in New York. Short sales
accounted for 33 percent of financially distressed transactions in November,
up from 24 percent a year earlier, according to CoreLogic.
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13. 6 Banks Paying Homeowners to Avoid Foreclosures
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14. 6 Banks Paying Homeowners to Avoid Foreclosures
• Banks, accelerating efforts to move troubled mortgages off their books, are
offering as much as $35,000 or more in cash to delinquent homeowners to
sell their properties for less than they owe.
• Lenders have routinely delayed or blocked such transactions, known as short
sales, in which they accept less from a buyer than the seller’s outstanding
loan. Now banks have decided the deals are faster and less costly than
foreclosures, which have slowed in response to regulatory probes of abusive
practices.
• Banks are nudging potential sellers by pre-approving deals, streamlining the
closing process, forgoing their right to pursue unpaid debt and in some cases
providing large cash incentives, “My guess is they want to get rid of bad
loans,” Chapman said. “If they short sale these types of loans, they have less
of a headache and have some goodwill with the homeowner.”
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15. 7 Number of Short sales on the Rise
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16. 7 Number of Short sales on the Rise
• Short sales are increasing as a percentage of home sales in many states,
helping some neighborhoods and homeowners avoid the more devastating
impacts of foreclosures.
• Short sales - when lenders allow financially strapped borrowers to sell homes
for less than their unpaid mortgage - accounted for 12% of home sales
nationwide in the second quarter. That's up from 10% in the same period
last year, says researcher RealtyTrac.
• The increases were sharper in some states, including California, Nevada,
Michigan, Georgia and Colorado, the data show.
• Short-sale homes, which often remain occupied until sold, tend to retain values
better than those that go through foreclosure. That helps values of neighboring
homes. In the second quarter, short-sale homes sold at a 21% discount to
non-foreclosure homes, while bank-owned homes went at a 40% discount,
RealtyTrac says. Short sales may also reduce losses for loan owners because they
avoid full foreclosure costs. Borrowers may qualify for new mortgages sooner
after a short sale than after a foreclosure.
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17. 8 More Short Sales Seen as Lenders Accepting Less
An increase in short sales, along with a shorter average time to sell such homes
and bigger discounts relative to normal deals, indicate the market is clearing
distressed properties more efficiently, Chief Executive Officer James Saccacio said
in the report.
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18. 9 Home Short Sales Increase as Banks ‘More Realistic’ on Market
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19. 9 Home Short Sales Increase as Banks ‘More Realistic’ on Market
• “It’s a win for borrowers who avoid foreclosure, buyers who get a house in
better condition and banks that lose less money, which is also a win for
taxpayers.”
• Pre-foreclosure homes took an average of 245 days to sell after receiving the
initial foreclosure notice, down from 256 days in the first quarter.
• The average sale price was $192,129, a discount of 21 percent relative to
non-distressed homes. Discounts averaged 17 percent in the first quarter and
14 percent a year earlier, according to RealtyTrac.
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