More lenders are approving short sales before the homes even get to foreclosure, a new survey shows.
So-called non-foreclosure short sales jumped about 60 percent in Broward County from July through September compared with the same period a year ago, according to RealtyTrac Inc. Palm Beach County saw a 33 percent increase.
In a short sale, the homeowner gets the lender’s approval to unload for less than the mortgage amount. Typically, banks haven’t agreed to those deals until after they file for foreclosure.
But the process of repossessing homes can drag on -- for years in some cases -- and banks are trying to avoid those lengthy delays, said Daren Blomquist, a RealtyTrac spokesman.
Another incentive for completing short sales is that lenders are able to comply with the terms of a $25 billion national mortgage settlement. The accord, reached in February, came more than a year after state attorneys general began an investigation into foreclosure practices following disclosures that banks were using faulty documents to take back homes.
“While there’s still a lot of distress in the market, lenders are starting to sell that distress earlier on,” Blomquist said.
Fort Lauderdale lawyer Joshua Pinsky said he hasn’t had problems getting lenders to approve short sales for clients who weren’t first served with foreclosure papers. “I honestly believe where there’s a will, there’s a way,” he said.
But other lawyers say they haven’t been as fortunate. Many homeowners have complained that banks won’t negotiate with them until they’re at least 90 days past due on the mortgage.
Only recently have lenders become better at streamlining short sales and communicating with struggling homeowners, Boca Raton attorney Jerron Kelley said.
“In the past, it was very frustrating working with the banks because they often would drag their feet, lose documents and constantly ask for updated financials,” Kelley said. “Now, what used to take six months to a year can take anywhere from three to six months from start to finish.”
The non-foreclosure short sale figures are estimates based on available data, RealtyTrac said. The increase in those transactions helps explain why Broward and Palm Beach counties saw fewer third quarter sales of homes in some stage of foreclosure.
Broward had 2,350 sales of homes in the foreclosure process, down 24 percent from a year earlier, according to RealtyTrac, an Irvine, Calif.-based listing firm. The homes sold for an average price of $139,814.
In Palm Beach County, there were 2,223 foreclosure-related sales, off 5 percent from the third quarter of 2011. The average price was $136,190.
Foreclosure homes are those in default, scheduled for auction or bank-owned, RealtyTrac said.Copyright © 2015, South Florida