Default Market Update (you may want to sit for this one)

By
Services for Real Estate Pros with PartnerFirst

Hey Fellow PSC's, As I sit in front of my computer screen, I am challenged with the task of writing a "value add" blog about the short sale space. Most things I want to write about are negative, depressing, and non-productive. So, as a compromise, here is a quick glimpse of what is going on TODAY. (since statistically we are scanners, not readers in our present day anyway) Default Market Update (highlights) * Est. 7 million homeowners in default (FYI, that is a lot) * Wells (portfolio loans) and Wachovia not postponing foreclosure...EVER! * Fannie and Freddie HAFA disqualifies homeowners that are within 60 days of foreclosure * The mortgage default process is being streamlined before our very eyes...new flow = loan mod, short sale, deed-in-lieu, foreclosure (wham bam...) * Nearly a 65% re-default rate on sub-prime loan mods (not the answer?) * Strategic defaults are on the rise (#1 reason = severe negative equity) * REO's have dried up in most markets (duh) * Component servicers and national agent panels / networks (A.M.S. Agent Management Services platforms) are forming to cater to the increased market demand (PartnerFirst plug) * Major problem = historically low response rates between loan servicers and distressed homeowners (less than 3% for some servicers) Whew. That is a lot of info to process. Most of this data points to one thing. More opportunity for real estate professionals to list and sell short sales. The system is changing, tightening, becoming more streamlined, and the net result is not yet clear. One thing we can assume is that as foreclosures increase and homeowners options shrink after loan mods are eliminated as a foreclosure relief option (via failed loan mod or not being qualified for one), distressed homeowners will be forced to reach out to their servicers earlier in the default process to explore potential solutions. One can only hope. Get ready for less foreclosure postponements, and more aggressive dealings from Fannie, Freddie, and the rest of the loan investor / servicer community. Get saddled up, we're going for a ride.

Posted by

PartnerFirst
Nationwide Real Estate Network
www.partnerfirst.org/members


 

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