From Businessweek, word that lenders are tightening up their guidelines for short sales.
“A record one-third of borrowers owe more on their mortgage than their properties are worth, notes research firm First American CoreLogic. The number of underwater homeowners will only continue to rise since values are still falling. And if distressed borrowers can’t negotiate short sales, more may be forced into foreclosure, further depressing prices.”
“With profits improving and access to capital loosening, lenders can afford to play hardball. Today banks take 9.5 weeks to respond to short-sale requests, vs. 4.5 weeks a year ago…”
The articles goes on to describe how the banks increasingly expect cash or signed notes by homeowners as part of the short-sale process.
This may have the effect of reducing the supply of short sales, and increasing the supply of foreclosures. It will be very interesting following how this impacts market values and inventories of available homes.
The full article is here -
http://www.businessweek.com/magazine/content/09_41/b4150024719851.htm
