In an attempt to thwart the overload of foreclosures that is continuing to thwart the economy, a new program is encouraging banks and owners to agree on a short sale in order to sell the property and prevent a foreclosure.
A short sale is when the bank or lending institution agrees to accept less than what is owed on the property in order to prevent a foreclosure. While short sales have always been around they have not always been used as much or as effectively as they can.
Under the new program that will begin April 5, homeowners who have been unable to get assistance with modification may be able to apply for a short sale. The lenders are given incentives to accept the short sale and in a big change from ever before, the homeowners will also be given up to $1500.00 in relocation assistance.
Read all about it at ?Program will pay homeowners to sell at a loss?.
While of course, the best thing that could happen is that the real estate market would turn around, people would be able to get financing and homes that have languished on the market for a long time would finally sell, the problem is that the value of the homes has plummeted to such an extent that that kind of recovery is not possible in the near future and may not even be possible in the foreseeable future. Until homes start selling again at a relatively rapid pace, home prices will increase very slowly. Nobody wants to get into the same type of real estate bubble that the U.S. has recently experienced.
Therefore the short sales solution may be an answer that can at least speed the process along.
