Positive News for Short Sales in Fresno and Clovis
Posted by Harold Penner on Tuesday, July 13th, 2010 at 6:20pm.November 2008 - There have been some interesting trends with the short sale market in the Fresno and Clovis area in the past few months.
Definitions:
- Short Sale:
Short Sales occur when a property is sold and the lender agrees to accept a discounted payoff, meaning the lender will release the lien that is secured to the property upon receipt of less money than is actually owed. The primary advantage of a short sale is that a borrower can typically has more protection against credit scores reductions and are eligible to purchase a home more quickly than those experiencing a foreclosure. - Foreclosure:
Often referred to as an REO (Real Estate Owned), this status indicates the property is now owned by the lender or bank as a result of a foreclosure.
Current Market Trends:
There are some disadvantages to placing offers on short sales in the Fresno and Madera counties. In October 2008, in Fresno and Madera County, 31% of all listed foreclosures successfully closed versus only 6% of listed short sales.
The primary reason that short sales do not successfully close is due to delays in closings. Most banks are not currently equipped to process short sales quickly enough for buyers. By the time an acceptance has come the buyer has moved on to another property. But, if that processing time could be improved, short sales would be beneficial situation for banks, sellers and buyers given the alternative of foreclosures.
Click Here to view more details regarding advantages and disadvantages of purchasing short sales.
Fall 2008 Short Sale Trends:
But, it would seem that those numbers may be improving in the future for a number of reasons:
- Statewide Short Sale Statistics - The State of California requires mortgage companies operating in the state to submit results regarding the processing of foreclosure, short sale and refinancing claims. The most recent statistics published (September 2008) show a modest increase from 5% in January 2008 of loan adjustments being short sales to 13%.
The ratio of successful short sales vs. foreclosures is also improving with 7% ratio in January 2008 versus 28% ratio in September 2008. Banks are accepting more short sales on a statewide level.
Click Here to view complete results. - Bank Short Sale Policy Improvements - Recently a loss mitigator from Wells Fargo spoke in Fresno regarding the current trends with short sales. One of the most interesting points was the efforts of Wells Fargo to increase the number of personnel and simplify the short sale process. The bank will be striving to shorten the response time from what was months to within 30 days of receiving an offer.
- Legislative Changes – SB 1055 was passed recently by the State of California. It provides tax relief for short sales that close between January 1, 2007 and December 31, 2008. Sellers would not be responsible for paying the state taxes of the difference between their loan amount and the selling price of their short sale. For more details, please contact your tax professional.
- Personal Experience – Anecdotally, I have witnessed an encouraging change in the response time of banks in the past month or two. Short sales that have been lingering for months with offers are finally being given attention and are closing. This includes short sales with banks such as: Countrywide, Wells Fargo, Home Eq, Saxon Mortgage, Citimortgage and Indymac.
Click Here for free assessment of whether your home qualifies for a short sale.
To learn more about purchasing or selling a home, please contact our office at (559) 322-7777 or email hpinfo@homesinfresno.com
OCTOBER 2008 MARKET STATISTICS - Fresno and Madera Counties
- Average Price of Sold Homes in October '07 vs. '08 - $314,726 vs. $194,506
(38% Decrease) - Sold Homes in October '07 vs. '08 - 373 vs. 793 (Over twice the amount of 2007)
- # of Foreclosures and Pre-Foreclosures Sold in October '07 vs. '08 - 79 vs. 532 (Increased over 6 times)
- Avg. Loan Percentage Rate in November '08 – 6.375% (30 Year Fixed)
Click here to visit HomesInFresno.com
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