On first glance I thought this was a terrible idea. Encouraging the homeowner to short sell rather than be foreclosed. The bank loses money, the owner loses their home and loses the money in it, and the government pays for it to happen. How is this a good idea?
I dunno, I sometimes feel like I'm on the edge of wrapping my head around the idea in such a way that it could become a good idea. But the whole market is too complicated.
Posted by TomDavidson (Member # 124) on :
Basically, it's just liquidating capital at a loss and giving more than a fair share of the result to the homeowner. And forcing the banks to accept it, thus ensuring that they take the brunt of the inefficiency.
It's actually a pretty horrible idea, IMO, but I suppose it's a great way to finish off what's left of the housing market.
Posted by Stephan (Member # 7549) on :
Oh look. Responisble people are screwed over again. This is only for deliquent homeowners. I am upside down on my loan, but only because the market tanked. My family took a responsible 30 year fixed rate with a decent down payment. I owe 5,000 over the current market value, but unfortunately can afford it. So if I quit my job and stopped making payments I can get the government to subsidize a short sale?
Unbelievable.
I hate the mentality that these people are being thrown out on the street by the banks. THEY CAN RENT!!!!!
Posted by theresa51282 (Member # 8037) on :
We had a terrible experience trying to buy several short sale condos about 2 years back right after the market tanked here in DC. It was so not worth the hassle. We offered asking price on two different units only to have one rejected outright by the bank. The other was accepted. We needed to move quickly and were told we could be in within 60 days. I was 9 months pregnant at the time and we had to be out of our current apartment in 90 days. We waited on the bank to get their end of the paperwork together. After almost three weeks of them telling us tomorrow, they called our realtor and told them they were not going to sell at that price and wanted 20k more. Our realtor said legally we could sue and would most likely win and get the condo at the asking price as they had already accepted our offer in writing. The problem was we had no time to go through what was likely a 6 month to a year long process to sue the bank. In the end we quickly found another condo that was not a short sale and had the whole thing signed and done within a week. I would not recommend short sales to anyone without a lot of time and energy on their hands.