March 29, 2010

Common Causes of a Short Sale

Posted to Short Sales / Foreclosures, Steve Randall

Here in Northern Utah, most of the homeowners are not directly feeling the impact of the downturn in housing values unless there is a need to sell their home now. Indirectly, however, every homeowner is impacted when there is a short sale or foreclosure in the neighborhood as these homes tend to sell for less than the normal market values. As a result, surrounding home values are indirectly impacted as these homes become comparables used by appraisers to establish new home values.

One of the reasons the administration is trying to curb the effects of delinquencies and foreclosures is to stop the downturn of home values. As the values continue to drop, there are more homeowners who become at risk of a short sale. Unless the trend is curbed, equity in homes will continue to be lost. Last week, a new effort was made to assist more homeowners with mortgage modifications.

Most of us think that we will never be in a short sale or foreclosure situation but most of the major reasons for homeowners can happen to even the most unsuspecting owner. For example, here is a list of common reasons that would qualify a homeowner for a short sale:

  1. Job loss
  2. Business failure
  3. Payment increase or a mortgage adjustment
  4. Divorce or death of a spouse
  5. Illness
  6. Relocation
  7. Reduced income
  8. Mortgage fraud
  9. Predatory lending practices

As you can see, many of these common causes for short sales and foreclosures can and do happen to many of us and when they happen to our friends and neighbors it can have an indirect impact on us as well. For more information on short sales/foreclosures please contact our office.

Posted By: Steve Randall



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