Arizona Short Sales benefit the banks.
You heard me correctly… The short sale process benefits the bank. Now, that’s not to say it doesn’t benefit you as well. In fact, short sales benefit consumers immensely. But make no mistake. Banks are out for themselves.
It’s important to note this as more and more consumers find themselves upside down on mortgages or facing job losses and unemployment, you gotta know how to best serve yourself in getting out of that upside down loan!
By focusing their efforts on short sales, the banks skip the arduous foreclosure process — they no longer have to manage, maintain and market a home — and instead make their money right away.
According to MoneyWatch $25 billion in relief for consumers was issued earlier this year:
In February, when 49 state attorneys and the five banks — JP Morgan Chase, Bank of America, Ally/GMAC, Wells Fargo and Citibank — settled their dispute, the banks agreed to stop improper foreclosure practices and provide $25 billion in relief for homeowners in the form of principal reductions, refinances and short sales (where a lender agrees to accept a purchase offer for less than is owed on the mortgage, releasing the homeowner from the loan).
But the question is… where has that money been put to use? In California, for example, of the $12 billion allocated there for consumer assistance only 2.7 percent has gone into vehicles like principle reduction. That’s a paltry $335 million of the total.
Short sales on the other hand… Short sales have (in that same time period) reached a whopping $3.9 billion of relief! That’s more than 10 times the effort going into mortgage reduction.
Why would the banking big boys put so much more into short sales? The answer is really simple actually… It benefits them much more than a mortgage reduction.
Basically, the banks have spent nearly $10.6 billion in just a few months, but largely on relief efforts that further their own interests. By focusing their efforts on short sales, the banks skip the arduous foreclosure process — they no longer have to maintain and advertise an empty house. Plus, they can get their money immediately and redeploy the capital elsewhere.
Numbers will soon be available for Arizona short sales as well. I don’t expect much variance, since the major banks in California are also the major banks in Arizona.
So if you find yourself in a situation where you are considering a short sale here in Arizona, then I encourage you to look into it and do so. Your success rate is much higher simply because you are asking the bank to do something it is already favoring: an Arizona short sale!