Short sales in Florida are happening more and more often; in fact, the good news out of Broward County, Florida, is that short sales have topped the number of foreclosures that were filed in the first quarter of 2012 – and this is big, big news since that hasn’t happened since 2008. In fact, Broward short sales are up 30% from the same time last year, and state wide, Florida is seeing short sales up 18% from 2011. This is good news for everyone.
Are these numbers reliable? Should be: they come from nationally known real estate analyst RealtyTrac, Inc. which just released the news of its analysis of the national real estate market for the first three months of 2012.
Broward County Foreclosure Filings Decline During April 2012
Banks are also filing less foreclosure lawsuits in Broward County – at least in April 2012. Again, according to RealtyTrac data, there were 11% less foreclosure filings in Broward County, Florida, than there were a year ago during the month of April and there were 30% less foreclosures filed in April 2012 as compared to March 2012.
That sounds great, but keep in mind that until April foreclosures were being filed at a steadily increasing rate for the first three months of this year – it’s to soon to tell whether or not April is a fluke . Statewide, foreclosures are still very, very popular and the State of Florida is still one of the top foreclosure-filing states in the country. In Brevard County, Florida, for example, foreclosures are looking to exceed the number of filings that broke records back in 2008.
Larry Tolchinsky’s Tip:
Foreclosure lawsuits and short sales are not two different games being played in different arenas, in different seasons. Often, short sales are finalized on properties that are the subject of a pending foreclosure action.
It’s true under the recent mortgage settlement that Lenders now have some barriers from filing a foreclosure while the home owner is negotiating a short sale in good faith; however, in some instances, the lender may still pursue a foreclosure lawsuit for things like pursuing a deficiency judgment against the owner to collect the difference between the short sale amount and the amount left due on the mortgage (the “short” of the short sale).
Lenders are also finding short sales helpful to their bottom lines because pursuing a short sale frees the lender from the expense of a defaulted mortgage as well as avoiding the added carrying costs on the bank’s books related to its “shadow inventory.” That’s the “REO” red line in the above RealtyTrac chart.
For borrowers, getting that short sale completed as soon as possible is important for many reasons. Moving forward in life. Getting that monthly mortgage payment burden off your shoulders. Letting go of a property that isn’t near the value of the mortgage debt. Getting the tax break.
Tax break? Yes. Remember — unless something changes up in Washington, the tax break on deficiencies will expire on New Year’s Eve and starting in 2013, the seller in a short sale will have a tax liability for the “short” part of the payoff.
Short sales have a well-earned reputation among potential buyers for taking a long, long time and oftentimes, being a big headache because of lender hijinks during the buying process. For those trying to short sale their home, it’s important to have a short sale strategy for marketing that home to a final sale as well as having a short sale strategy for getting the lender to play ball. Short sales are happening-and they are worth all the time and effort.
If you have questions or comments, please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com or (954) 458-8655.
