Short Sale Blog

RealtyTrac, an online aggregator of foreclosure information, just released it's mid-year foreclosure report. While the most recent 6-month time period shows a 5% decrease from the last half of 2009 - compared to the same time-period last year, foreclosure filings are up by 8%.

Nationwide, one in 78 properties received a foreclosure filing in the first half of 2010. It is expected that by year end, a over 3 million properties will have received a foreclosure notice in the United States.

In the month of June 2010, in King County, there were 1,615 properties that received a foreclosure filing. That is a rate of one in every 517 properties received a foreclosure notice. Specific areas that were hit hard in June include Fall City with a rate of one in every 184 properties, and Maple Valley with one in every 211 properties receiving a foreclosure notice.

Overall, the trend is not positive in King County and the Seattle area. It is actually frighteningly bad. I'm not sure people realize the crisis our local population is currently going through. The amount of dislocation and upset in thousands of our neighbor's lives is very real, and is increasing rapidly.

• February - 561
• March - 832
• April - 1,282
• May - 1,502
• June - 1,615

Our mission here at Seattle Short Sales, Inc. is to help as many homeowners as possible through this difficult period of time. If you are a homeowner, please contact us today for assistance. There is a never a charge to a homeowner for our service. You will always have an attorney available to you at no charge for both initial consultation and lender negotiations.

For almost three years, the jumbo mortgage market has been nearly frozen. But the banks have recently decided it is time to re-start lending to the high-end market, and homeowners are beginning to find relief.

A jumbo mortgage is a loan of more than $729,750, not backed government-sponsored enterprises such as Fannie Mae or Freddie Mac. Last year at this time, the average rate was 6.86%. Today, it is 5.48, a rate that homeowners haven't seen since 2003.

In this foreclosure crisis of the Great Recession, the first homeowners hit were the ones with adjustable rate mortgages in lowered priced properties. When the mortgage reset, or the homeowner lost their job, there wasn't any safety cushion, and the properties were quickly taken back by the banks.

The next wave of defaults were on higher-priced properties. In general, homeowners in higher-end properties had more financial cushion to ride out the downturn. However, due to easy qualifying terms in previous years, many homeowners with jumbo loans realized they they had purchased more house than was necessary.

The problem over the last three years was that if the owner of a higher-end property wanted to sell, whether they had equity or not, they had trouble finding buyers who could get a loan. This lack of buyer financing created pressure on high-end house prices, further exacerbating problems for high-end homeowners.

High-end properties increasingly became situations where the homeowner owed more on their loans that the property could be sold for. In this case a short sale was necessary. Short sales can be difficult in themselves. Faced with a high-end short sale property, with a lack of buyer financing, it became an ever more dire situation.

The new lower rates are going to be a tremendous relief to the high-end market. More-affordable jumbo loans will not only allow some homeowners to re-finance into a more affordable loan product, but allow more buyers to move into higher end properties.

To validate this trend, Citibank announced that applications for jumbo mortgages were up 30% over the last 60 days. Vijay Lala of Bank America stated that they are now offering competitive rates in the jumbo market, stating, "We are very active in that marketplace, and we believe that jumbo loans will help lead the recovery in housing."

Seattle Short Sales, Inc. is a specialist in the marketing and short selling of high-end properties in the Seattle area. Please contact us today and we would be glad to answer all of your short sale questions.

Roughly 16% of mortgages on the LendingTree network in Washington are worth less than what is owed on the loan.

LendingTree is an online exchange for mortgages. According to LendingTree, Washington came in slightly below the average negative equity national average of 18.1%. The state with the lowest percentage was Oklahoma with 6%. Nevada topped the chart at 69.9%.

Government default studies have shown a direct correlation between rates of negative equity and default rates. Homeowners who owe substantially more than their home is worth are much more likely to default on their loan, or walk away from their mortgage.

If you are a homeowner looking for answers regarding your negative equity situation, please contact Seattle Short Sales, Inc. today for help understanding your options.

One of the positive developments in the short sale industry in the last year was the rollout by Equator of an online short sale management system. Currently, Bank of America and GMAC are the primary users of the system. Previously, getting a short sale approved by Bank of America could easily take 6-12 months. They were simply deluged by paperwork from hundreds of thousands of borrowers and couldn't keep up.

The Equator system is a web-based file management system with built-in case tracking. Overall, we are very pleased with the system. If you go to our short sale approvals page, you can see how long it is now taking to get approval letters. In particular, look for ones titled BAC Home Loans. Those are approved short sale approval letters that Bank of America issued via the Equator system

We are glad to see that Equator is unveiling a software platform for smaller firms. We expect that this development will only help homeowners who are looking to sell their home and avoid foreclosure. If you are a homeowner in Washington State and would like assistance selling your home via a short sale, please contact Seattle Short Sales, Inc. today.

Today, Lender Processing Services (LPS) issued their latest report on foreclosure and short sale statistics, across both the United States, and here in Washington State. Overall, the trends are not positive. The total percentage of borrowers in the United States that are delinquent (excluding Foreclosures) is at 9.2%. This is a year-over-year increase of 7.9%. Foreclosure inventories increased by 13.5% during the same period.

The one bright spot is that completed short sales are on the rise. The increase in the last quarter was 9.2%. Over the last year, the number of completed short sales rose from 18,619 to 41,030 - an increase of 120%.

In Washington State, the number of non-current borrowers has stayed roughly the same in the last year, at 8.7% (excluding foreclosures). In regards to short sales, here at Seattle Short Sales, Inc. we have seen a tremendous increase in homeowner awareness concerning short sales. Many homeowners have taken the time to educate themselves on the benefits of a short sale on their credit score and future borrowing capabilities.

If you are a homeowner, please contact us today for assistance.