Short Sales Replacing Modifications As “The New Norm”

by Jan Steward on May 29, 2013

Business Graph v17In a recent article, Fitch Ratings reported  loan modifications are declining,  while short sales are on the rise. According to the organization’s statistical information, the number of resolutions in the loan modification category decreased to 26 percent in the last half of 2012, down from 57 percent in the first half of 2010. Fitch Rating’s Managing Director Diane Pendley, stated that “loan modifications have fallen due partly to overall declines in mortgage delinquencies.” Pendley continued by saying that loan modifications “may also have fallen out of favor since many modified loans have already failed and do not qualify for another modification.”

In summary, the rating agency explains that in instances where modification are not possible, servicers will look to facilitate a short sale, allowing the servicers to save money by avoiding the cost of foreclosure.

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What do you think? Are you seeing a decline in loan modifications with your clients?

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Jan Steward

Jan Steward brings a wealth of experience to the Arizona Association of REALTORS® as the manager, risk management. She is a former title company manager and escrow officer with paralegal training. As a REALTOR® and broker, Jan served the Northern Arizona Association of REALTORS® (NAAR) as board president, vice-president, director, MLS chair, delegate to NAR’s national convention and a member of the Professional Standards and Grievance Committees. Jan was honored as REALTOR® of the Year by NAAR. She also has served on AAR's Professional Standards Committee and a variety of ad hoc committees.

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