New York Times: Lenders More Open To Short Sales

When the value of a home is less than the amount of outstanding debt secured by the home, the homeowner is in an untenable predicament. In this circumstance, if the property is to be sold, the owner must either bring funds to the closing table to pay off the debt, or negotiate a "short sale" with the lender (see my blog post dated January 6, 2009). If neither option is available, the homeowner may face foreclosure. Lenders, particularly home equity lenders in second position, have been reluctant to agree to short sales, but the New York Times now reports that this method for escaping foreclosure may be getting a little easier to navigate. Whereas to this point second lien holders often resisted agreeing to short sales, mortgage lenders say they are now working more cooperatively on short sales, and proposed changes in the industry could increase the number of these transactions. To read this New York Times report, click here: http://www.nytimes.com/2009/05/17/realestate/17mort.html?emc=tnt&tntemail1=y.