Short Sale Process Increasing in Michigan
Short sales, the first choice for many distressed borrowers, have largely been an exercise in frustration. But as lenders are looking for ways to stop the tidal wave of foreclosures, short sales are slowly picking up in Michigan.
The number of short sales in February was 175 in metro Detroit up from 38 in January 2008, according to figures compiled by Realcomp, a Farmington Hills-based multiple listing service.
While that’s less than 5% of total sales for February, the number is moving in the right direction, realty agents say.
A short sale enables a distressed borrower to sell a home for less than what is owed on the mortgage with the lender forgiving the difference. Farmington Hills resident Brian Christian is aiming to work out a short sale with his lender.
But many lenders decline or take so long that the buyer moves on to another deal and the house ends up in foreclosure anyway.
Realcomp plans to partner with government-backed lender Fannie Mae soon on a pilot program that would help streamline the short-sale process in Michigan. It could serve as a national model.
The program would aim to make it easier for distressed homeowners underwater on their mortgages to sell instead of going through a foreclosure.
“We don’t have a lot of the details yet,” said Karen Kage, chief executive of Realcomp. “Whatever we do will be in the best interest of the homeowners and the Realtors trying to make a living selling these properties.”
• SHORT SALES TAKE TIME: They require owner to show hardship
