Las Vegas homeowners like to go short
Going short in this case has nothing to do with the short position people take on the stock market, hoping to profit from a declining price of a security. Short sale in real estate is a concept where the homeowner is allowed by the bank to sell his property for less than what his mortgage balance is. It’s one way to avoid the dreaded foreclosure.
Before a short sale is even discussed, the lender needs a hardship letter from the borrower/ seller, a valid contract between the buyer and seller and a preliminary settlement statement. The homeowner must prove a severe financial hardship to get the lender’s ear. Once all the paperwork is in, the negotiations can start. Many banks really have been ill-prepared to deal with the rising number of potential foreclosures and therefore typically lack the necessary staff to tackle the issue. So be aware that it'll take some time and patience from those involved in the process to see it through.
Right now there are about 3,350 homes marked as short sale properties in Vegas, a number that has doubled from just four months ago, reports Wingate Mortgage Group. Of these 1,450 are vacant, a clear hint that they are owned by investors. And the current thinking is that these figures will keep growing at least for a while.
By doing a short sale, borrowers in distress will hope to salvage their credit rating and avoid the negativity of it all. Banks will benefit, too. They don’t have to spend money in auctions, upkeep and additional staff. There is still another beneficiary, namely the home buyer or the investor who could purchase a property under market value. All combined, it could then be called win-win-win, right?
Before a short sale is even discussed, the lender needs a hardship letter from the borrower/ seller, a valid contract between the buyer and seller and a preliminary settlement statement. The homeowner must prove a severe financial hardship to get the lender’s ear. Once all the paperwork is in, the negotiations can start. Many banks really have been ill-prepared to deal with the rising number of potential foreclosures and therefore typically lack the necessary staff to tackle the issue. So be aware that it'll take some time and patience from those involved in the process to see it through.
Right now there are about 3,350 homes marked as short sale properties in Vegas, a number that has doubled from just four months ago, reports Wingate Mortgage Group. Of these 1,450 are vacant, a clear hint that they are owned by investors. And the current thinking is that these figures will keep growing at least for a while.
By doing a short sale, borrowers in distress will hope to salvage their credit rating and avoid the negativity of it all. Banks will benefit, too. They don’t have to spend money in auctions, upkeep and additional staff. There is still another beneficiary, namely the home buyer or the investor who could purchase a property under market value. All combined, it could then be called win-win-win, right?
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