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Obama Administration Does 180 on Foreclosures

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Foreclosure Crisis

Will the Foreclosure Freeze Boost Short Sale Activity?

One thing we’re keeping eye on is whether the Foreclosure Freeze is heating up the Short Sale market. Do you see any uptick in banks’ interest in doing short sales or note sales as ways of working around the foreclosure problems?

Until recently, the rhetoric coming out of the White House made policy recommendations that the best solution to the problem of mounting mortgage defaults was doing more, and more aggressive, loan modifications, including principal reductions in certain situations. Loan mods were touted as a way to keep homeowners in their homes, thereby stabilizing neighborhoods and slowing the freefall of home values, driven down by the glut of bank-owned properties.

Well, not any more.

Last week the White House Press Secretary, Robert Gibbs, said that without having a fnctional foreclosure process, “recovery in the housing market stops. It’s frozen.”

Clearly, the pendulum has started to swing back toward the viewpoint of people like HousingWire’s Paul Jackson, who wrote moths ago that the solution to the housing crisis “was spelled R-E-O.”

Letting the market do its thing is painful when it involves families losing their homes, but artificially postponing the inevitable doesn’t make sense.

(Read this CNN article to find out more about the administration’s new position supporting foreclosures.)

One thing we’re keeping eye on is whether the Foreclosure Freeze is heating up the Short Sale market. Do you see any uptick in banks’ interest in doing short sales or note sales as ways of working around the foreclosure problems?

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  • JACOBJAMESUS

    It sounds dreadful . There must be an answer . I pray for a REAL SOLUTION SOON !
    JAMES H. LOWE

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  • Julia2muchtime

    I have worked in sales and finance of homes for over 20 years. This modification program was just a way for people to make money! If you were self employed, they aren’t going to modify for you. You go to a HUD approved counselor and all they are are paper gathers. They get paid thru grants so they don’t really care if you keep your house or loose it, because I have been making a modified payment for over 18 months and now EMC mortgage is going to deny me! I have been in my house over 13 years and I have been making payments, I have been making an effort to pay my mortgage not like this people that are living in there house over 12 months without payments, then taking cash for keys and on there way! How is this helping the economy? The Making Home Affordable Program was suppose to help the people who wanted to keep there homes but, in most cases it doesn’t really help the people that need the help. I now am working for a company doing cash for keys and then listing there foreclosed home. This is sad and a hard job to do. But I wanted to keep active in real estate and try to make a living to support my family.

  • Buyyourcribnow

    Banks seem to be countering shortsale offers to make the approval just out of reach. Lenders are also requiring the sellers to contribute upwards of $5000 which is not going to happen so yes the solution is spelled out R_E_O and looks like the writing is on the wall for millions. I am an active realor struggling daily with this situation.

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