Foreclosure Cash

Real estate short sales have always been at the forefront of investment activity. US have seen it going through ebb and tide. Recession has made real estate short selling being used as a decisive tool to rescue finances from going kaput.   Recently, US administration standardized real estate short sales plan that is scheduled to roll out in the next few months. Banks are increasing short sales under pressure from the Obama administration.

If the reports are to be believed,   the volume of default notices that trigger the start of the foreclosure process has been declining for the last two consecutive months. Earlier it was observed that homeowners are falling behind by at least three payments to clear their mortgages. In January, bank repossessions dropped more than 24 percent in some parts of US. Drop in notices of default was observed to be nearly 50 percent; and the amount of foreclosure related filings declined almost 13 percent during the year.

Short sales are also receiving the push up from the increasing numbers of banks. In the first six months of 2009, short sales almost tripled to 40,000 from the same period a year earlier. Yet, according to the data from the Office of Thrift Supervision and the Office of the Comptroller of the Currency, foreclosures started or completed outnumbered short sale by twenty five times, in the first half of this year.

New Treasury Department guidelines for foreclosure alternatives scheduled to take effect in April 2010 will require lenders to consider borrowers for a short sale on their primary residence 30 days after missing two consecutive payments on a modified loan or after the borrower requests a short sale.

To keep tab on the short sales overturns, JP Morgan doubled the number of staff trained to handle short sales since the beginning of this year.

Another interesting fact to note is that as of Oct 1, losses on prime loans going through the foreclosure process averaged 49 percent versus 34 percent for a short sale, according to a report by Laurie S. Goodman, senior managing director of Amherst Securities Group LP. The report adds that for sub-prime loans, losses averaged 73 percent for a foreclosure compared with 59 percent for short sales.

Going by all these facts and figures, real estate short sales are on an ascend, if not a high; and the time is just right to go for real estate investing and make fortunes.