Short Sales vs. Loan Modifications in Stockton and Lodi Real Estate Market
The evidence available indicate that loan and mortgage modifications are not working for homeowners under stress. Many of those receiving loan modifications under the governments Home Affordable Modification Program (HAMP) are re-defaulting. It is estimated that 55 to 65% of prime loans receiving modifications will likely re-default and that modifications on sub-prime loans will have a default rate of 75%.
These are staggering projections and home owners in Stockton and Lodi are turning to short sales to protect themselves from foreclosure. The first attempt at solving your mortgage problems is always to find a way to keep you home and the Lilly Team at PMZ Real Estate support that and work with clients to a least first explore that avenue. While it is admirable of the government to help homeowners keep their homes it is not working. Homeowners are finding out for the most part that loan modifications don't work.
When the loan modification doesn't work there is relief in sight for those homeowners facing foreclosure or are in a distressed situation and that is the short sale. Often loan modification is often just delaying the inevitable. But there is some good news for distressed homeowners with sub-prime loans facing foreclosure, currently 35% of sellers facing foreclosure are successful in selling their home through a short sale and 50% of homeowners with prime mortgages have been successful.
Banks such as Wachovia, Wells Fargo, Bank of America and Chase are finally catching on that short sales are much more to their benefit than foreclosures and beneficial to their bottom line. According to ForeclosureRadar the statistics indicate that foreclosure activity is down 17%.. This is the second month in a row where foreclosure filings have declined.
The real estate market in Stockton, Lodi and San Joaquin Country is rapidly turning to short sales. Over 50% of the MLS listings are now short sales and that is likely to increase. As competition between buyers heats up and multiple offer situations increase with REO and foreclosure properties home buyers are seeking out short sales and real estate agents and Realtors are actively listing them.
The benefits to homeowners selling their homes in a short sale far outweigh the negative impact of foreclosure. Two of the prime benefits are the impact on future credit and the ability to purchase a new home in 2 years rather that 5 to 7 years with a foreclosure.
For more information contact Hugh Lilly at 209-479-9222 or e-mail Hugh at thelillyteam@comcast.net . Visit our web-site at www.hughlilly.com for more information and to read more posts on our Stockton/Lodi Real Estate Blog.