Foreclosures vs. Short Sales – Lenders and Title Insurance
For the past week we heard that banks such as JP Morgan Chase, Bank of America – now all 50 states, and GMAC suspended foreclosures in over 20 states including Florida. Florida Judges halting foreclosures, primarily due to fraudulent and improper paperwork and rubber-stamping or “robo-signing” without reviewing the documents. Title Insurance Company stopped issuing owner’s title policy on foreclosed properties making it impossible to buy a foreclosure.
Most owners who have stowed away their Owner’s Title Insurance Policy may want to find it and dust it off, especially with all this foreclosure mess where there is no real assurance of rightful ownership.
When it comes to the Lakeland Foreclosure market I noticed today a decline in foreclosure being actively marketed. For the past seven days only, there were 47 foreclosed homes yanked (placed temporarily off market in the Multiple Listing) primarily for reasons of paperwork issues as I indicated before.
Foreclosures counted for over 50% of Lakeland’s total overall sales so far for this year. The current “In Limbo” effect where no additional foreclosed homes will be added, current foreclosed homes have delayed closings, a drop in sales is anticipated for the remainder of this year.
The so ever dreaded Short Sale surely may now become the best possible solution when selling and buying:
- Negotiations will be more forthcoming between the seller’s lender and the Realtor® handling the short sale
- Short Sales may be expedited
- Issuance of Owner’s Title Policy guaranteed