01-17-2013 07:16 PM
Now seen this happen on 3 escrows just this month - and I'm not happy about what it means for the limited inventory we have available, since all 3 have now fallen out.
When a seller enters escrow on a short sale, the banks have sent out loan modification paperwork that promises a "fasttrack" review and approval. it also includes a principal reduction offer, which the banks have previously been loathe to mention.
Not surprisingly, in each case the seller has decided to pursue that option and is declining to continue with the short sale. And yes - I am aware that a seller can't just cancel escrow.....but in the real world, most buyers do not want to pursue legal action to force performance and drag things out for months.
I imagine the theory from the bank side is that they are going to take a loss on the short sale - so they might as well offer the same principal reduction to the current owner, and get to credit that as a loan mod and reduction towards their global settlement with the government.
It's great that this might help some people stay in their homes, but it is going to make things even harder for new buyers out there....short sales are probably the largest source of inventory we have right now.
01-18-2013 11:07 AM
It's great that this might help some people stay in their homes, but it is going to make things even harder for new buyers out there....
are you afraid to be politically incorrect here?
what's so great about it? that hardworking rational people subsidize housing for others?
01-18-2013 01:09 PM - edited 01-18-2013 01:10 PM
I haven't been keeping up with this, but isn't principal reduction subsidized? Whatever, there's only one party to deal with (no buyer) so it's probably easier. Yes, and that most likely means low inventory continues.
01-18-2013 02:07 PM - edited 01-18-2013 02:09 PM
I haven't been keeping up with this, but isn't principal reduction subsidized?
you know what they say in poker about a player who cannot figure out who is a sucker at the table?
01-18-2013 02:09 PM
I don't want to come off so harsh Lexa :-)
i would not call simple fact as that one "so harsh"...
but I don't care about being politically correct either.