Updates on Short Sales from the CDPE Momentum Convention

June 9, 2010

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untitledAt the end of May, I was fortunate to go on a road trip with Davidson Realty’s Short Sale Coordinator Cindy Vaughn to Tempe, AZ to attend the Certified Distressed Property Expert (CDPE) seminar. We had a great time and learned a lot. There were many great speakers and I wanted to share some of the comments I found most interesting.

Rick Sharga from Realty Trac Inc. talked about three waves of foreclosures. The first wave of foreclosures occurred when employment was strong and the economy was growing. These foreclosures were caused by the sub-prime loans. The second wave of foreclosures was caused by unemployment. They estimate that there is 1 foreclosure for every 6 to 10 jobs lost. The third wave of foreclosures is mainly due to Option Arm loans resetting. Many people will see payments rise by $1,000 to $1,500 per month. The resetting Option Arms will peak in 2011.

Matt Vernon from Bank of America spoke about improvements to the short sale process using a new technology called Equator. Just to give you an idea of their volume of short sales, in March 67,000 short sales were initiated and 64,000 decisions were made. They have made major improvements in the time frame for approvals; however, Matt pointed out that only about 10% of the loans are owned by Bank of America. Most of the approvals have to be made by an investor and some investors respond more timely than others.

Diana Stauffer of Wachovia Bank shared an interesting statistic about average sales prices. The average price for a short sale is $212,400. The average price for a move in ready foreclosure is $191,900. She did point out that they do not see many move in ready foreclosures. A damaged foreclosure average price is $116,200. It is pretty clear that a short sale is a better option for the homeowner and the lender.

There were other great speakers discussing the stress homeowners are experiencing and how different personalities deal with stress and the stages of grief that many homeowners have to work through. Cindy and I both learned a lot, had some great meals, met some terrific people and came back ready to make a difference by helping homeowners make informed choices about their St. Augustine, FL homes.

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