Short Sales Popular for the Next Two Years

By Sari R. Updated on 2/22/2013

At the Mortgage Bankers Association’s National Conference and Expo, mortgage professionals spoke about if short sales will add to or deter from the housing recovery.  There has been an increasing amount of short sale activity this year, and analysts believe that this will continue into 2014. 

In 2012, the record for short sales was set as the 1 million mark was passed for the first time ever.  More specifically, 4.6 million properties were sold last year, making over a quarter of these sales short sales.

Analysts speculated on why there has been such a rampant increase in short sales, and have come to the conclusion that they are easier for servicers to handle and finish quickly.  Process changes and technological updates have also contributed to why short sales are able to be processed with much more ease.  In 2012 alone, short sale timelines have decreased 20% because processors are now much more educated than years prior.

However, despite the increasing popularity of short sales, there are still challenges involved with this specific type of process.  Analysts named the following as challenges: second-liens, the buyer, waiting periods, and complexity.  Another challenge that many don’t take into account is realtor desire, though this has significantly increased over the years due to the added simplicity.  Overall, the REO inventory has decreased; this has allowed agents who wanted to be exclusively REO to eventually become a short sale agent also.  The certification process for agents who wanted to learn more about short sales is now easier and more accessible than ever before.

Analysts believe that while short sales have become an increasingly viable option for buyers, they haven’t been sufficiently educated.  Many buyers have been finding themselves in distress as they aren’t aware of all the options available to them.  As short sales are only going to grow more popular and inevitable, short sale education will be crucial and necessary.  Analysts concluded that 2013 will most likely set a new record for short sales.

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