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The Case for Walking Away, Short Sales v. Foreclosure

Housing Crisis Upside: Bargains for Everyone
ABC News
January 12, 2009

Real estate watchers have been saying it for months now: It's a buyer's market and it's only getting better. "It really is almost a national situation where we can find you at least one good deal almost everywhere," said Rick Sharga, the vice president of marketing for the foreclosure listing service RealtyTrac.

FDIC Pushes Banks for Reports on Use of Government Aid
Wall Street Journal
January 12, 2009

The Federal Deposit Insurance Corp. on Monday pushed the more than 5,000 banks it regulates to provide information on how they are using billions of dollars in government aid to help struggling homeowners avoid foreclosure.

The Case for Walking Away
Newsweek
January 12, 2009

In January, we're supposed to sit down and organize our personal finances. This year I'll risk my good-girl reputation with a subversive idea: go bankrupt in 2009. If you're reaching the end of your rope, don't try to hold on. Save what you can.

Short Sale v. Foreclosure
Wall Street Journal
January 12, 2009

Is it better to negotiate with a short seller or look for houses already owned by the bank? But bear in mind that in the case of both short sales and bank-owned homes you are negotiating with lenders rather than sellers. In a short sale, the seller might be desperate to accept any offer to avoid foreclosure, but that doesn't matter if the primary and junior lien holders don't agree to it. With bank-owned properties, you will be dealing with the "real-estate owned" or REO department of the lender who took ownership of the house at the auction. In both cases, you should be prepared to be patient, since lenders are overwhelmed with distress sales these days and may take weeks to respond to your offer.

Posted: Tue, January 13 2009 9:31 AM by Octavion
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Comments

Shelley Gross said:

Short Sale v. Foreclosure

The Wall Street Journal says they are about equal in waiting time. I agree with that, however, there is a difference.  A large number of the foreclosure properties come to the market in the Los Angeles area damaged, while short sale properties are in a lot better condition. There use to be a problem with the agents doing the BPOs for the properties of short sales who were inflating the properties values. This was done so agents could later get the properties as their foreclosure listings. Since January 1, 2009, they will be penalized so I think that will stop happening.

Shelley Gross

 

 

# January 14, 2009 10:43 AM

Octavion said:

Shelley,

That's an interesting point.

Octavio

# January 14, 2009 2:34 PM

Gryphon said:

I have about decided to walk away. My house has been on the market for a year, with no nibbles. I tried to negotiate, but my lender--Countrywide--said no dice, if the house is on the market. That's a Catch 22.  I'm satisfied there's no longer any shame or social opprobrium and plan to cease mortgage payments as of Feb. 1. Most say I have 5 or 6 months before foreclosure, which will allow me to accumulate enough of a kitty to move into a rental. I've written the lender about my intentions and hope--without expecting it--that they won't start harrassing until about Feb. 15. Does anyone have any experience to shed on walkaway. The Times last Sunday had an excellent piece on it. Seems 1000s are no doing it.

# January 15, 2010 2:49 PM

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# May 31, 2012 9:09 AM

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# June 2, 2012 10:24 PM
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