Banks Incentivizing Short Sales

Little attention has been given by the media to many of the banks across the nation that are offering short sale incentives to homeowners currently underwater. In many cases the only way a homeowner would know whether or not his or her bank was offering an incentive is to have opened every piece of mail and read the letter from the mortgage holding bank that highlights the sort of incentive that the bank is promoting. Certain banks are running different promotions in different areas of the country. The reason for this is due to the regional aspect of real estate markets. Banks have different motives in different areas due to the given health of a particular segment of the real estate market.

Another factor to consider is that the sort of loss that banks incur When accepting the short selling price of a given property. The given loss that the bank will take (or we should say investor will take) will potentially lessen the value of the incentive for the home buyer.

Fuzzy language from the banks?

Part of the reason these programs are getting such little attention at the moment is because the way they have been run by the banks if someone murky. That banks are not using consistent approaches throughout the country highlight the fact that these things are simply testing these measures right now, and after collecting data on homeowners who have applied for these incentives, will likely employ more sweeping radical incentives pushed by PR campaigns that motivate the media to follow and cover some of these incentivized programs.

Having worked in the industry for a while, I can honestly say that it is very fascinating to watch the powers that be test different vehicles for market movement. Of course the banks of the last few years have received plenty of bad press due to the way they managed risk over the last decade, but we also ought to consider and praise the banks when they do try to implement new effective financial strategies that attempt to clear the market of debris so that it can once again run as efficiently as if it effectively as it did for so many families in so many lives in the past.

We’re still operating at lows when it comes to market turnover. Homes are not exchanging hands as readily as they should given the population size in Southern California. It’s when the market is operating efficiently that will once again see stability, and from the stability positivity will grow in prices will no longer be quite as volatile.