Taking a step back and looking at the big picture, why are all these banks PROACTIVELY committing resources to allow borrowers to renege on millions and millions of dollars of legal mortgages? These lenders literally employee 1000's of people for the sole purpose of assisting borrowers with "getting out" of mortgages where they might owe tens and perhaps HUNDREDS of thousands of dollars.

The sole reason: there are 100,000's of homes fitting this description and this tidal wave will swamp our real estate landscape should it go unaddressed.

So why not just ramp up their REO departments to handle this "flood" of foreclosed homes? Actually, there are a couple of reasons...

1) Lending standards and "book" balances. Per lending regulations, however LOOSE they mayy be to some, lenders can only have a maximum amount of bank-owned property on their books at anyone time, otherwise they become restricted in the amount of money they can loan. By doing a short sale, they circumvent this restriction as they never take ownership of the property and can continue loaning money to make money.

2) Actual cost. Sure, the foreclosure process "punishes" the homeowner by ripping their home from them in a most publicly humiliating way, branding them with a scarlet "F". But when the smoke clears, the bank is now the brand new owner of a home it doesn't care a bit about BUT had to invest in to get it back only to sell it. From foreclosure legal fees to appraisal costs to rehab costs to satisfying municipal liens to insurance and tax costs to REO closing costs, these are all ADDITIONAL expenditures a lender must make in order to take the home back and then divest it from their books.

3) Overall cost: The latest figures show that on average, short sales are selling for about 17% BELOW MARKET, which normally reflects buying the property as-is and costs to rehab it after closing. Why would they ever want to sell a property at that much of a discount? Because the going rate for a BANK-OWNED home is about 30% below market. So after spending all that money to take the property back, they take an even LARGER hit selling it themselves.

4) Owner-occupied vs. vacant. You probably know a homeowner who is upside down on a mortgage and may be living payment-free. I'm not addressing that moral dilemma. However, processing a short sale where the owner is still in the property, paying utilities and providing even minima of upkeep is preferential to a VACANT bank-owned home which may have been vandalized BEFORE the foreclosure auction out of spite of AFTER the auction out of mischief. Obviously not all short sales are owner occupied, but all short sales have at least a realtor trying to sell the property, thus keeping tabs on it.

I say all that to say this - when you are buying a short sale, don't think the bank is doing you a favor. Know that you are doing the BANK and borrower a favor.

I am pleased to announce that I have just earned the National Association of Realtor "SFR" designation - the Short Sale and Foreclosure Resource designation. With such a large contingent of my business being short sales and bank-owned foreclosures, I felt my clients would be best-represented by a realtor who is certified in such areas.

I take pride in handling my short sales with dogged determination and efficiency. To date, I have closed 10+ short sales with excellent results for my sellers. The key to Short sale success is constant communication with all parties involved. It keeps the banks moving forward, the buyers engaged, and the sellers optimistic.

Here are a couple terms that may be new to you:

1. Convenient foreclosure: This occurs when the seller already has a second dwelling to move to and will allow their over-mortgaged property to be taken back by the lender, regardless of their monetary assets.
2. Strategic foreclosure: An occurence where a homeowner will acquire a 2nd home BEFORE their 1st home goes into foreclosure with the express intent of allowing the 1st home to be taken back by the bank.

The bottom line: this massively-depreciated real estate market has affected just about everyone I know and I have re-committed myself to assisting embattled owners as best I can.

If you have any questions about the short sale process, just let me know. I don't profess to know EVERY thing about the sale process, as each bank is different. However, there are general rules that most banks adhere to and I'm always willing to share my knowledge to help a client.