Home Owners Turn to Short Sales to Avoid
Foreclosure
6/1/2006 - 7:28 PM
 Lenders are reporting more home owners are defaulting on their
mortgages. But before those defaults turn into foreclosure, some sellers are
turning to short sales -- if lenders agree.
Home owner Gloria Romero is in that position now. She bought her three-bedroom home in North Sacramento last
year but has to sell it. She has listed the home for $250,000 hoping to cover
her mortgage balance. Thursday she received her first offer -- $219,000. That's
some $30,000 less than her mortgage.
So, Romero is turning to a short sale instead of letting the bank takeover the house. A short sale is when the
lender accepts an offer that is less than the current balance. Not many lenders
are accepting these negotiated transactions because it affirms the real estate
market has settled from its accelerated growth that drove prices up in the first
half of the decade. But for some home owners caught with having to sell their
property and negative equity, it's a better alternative than having a
foreclosure on their credit record.
Scott L. Williams is a realtor with Re/Max Real Estate. He says his office has gone from no short sales in seven
years to nine such transactions in the last few months.
"Back in the '90s, I became the short sale guru in Sacramento and did several hundred of
them," Williams said.
The realtor says he's working with another home owner in Natomas who has to move and has received an offer of $399,000 for her home. That is about $60,000 less than what she owes on it. Like Romero, the home
owner hopes the lender will agree to let the house sell for less than the
mortgage balance or will make a counter offer.
Even though a short sale will become part of these homeowners' financial history, Romero says it's better
than a foreclosure. "I don't want my credit to be really ruined."
As for actual numbers of mortgage defaults, there were 37 percent more statewide in the
first three months of this year compared to the same period last year, according
to foreclosures.com. In Sacramento County, there were 1,140 defaults reported in
the first quarter, 2006, and less than half as many -- 738 -- last year at the
same time.
Still, records show most home owners who have defaulted catch
up with their payments or sell their homes before losing them to the lender.
Originally Published: http://www.news10.net/storyfull.asp?id=17910
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