Fannie Mae’s new requirement that all HAFA short sales to be active on the MLS for at least five days amounts to shutting the barn door after the horses have escaped:
On or after August 1, 2013, all properties being considered for a standard short sale/HAFA II must be listed with an active status on a multiple listing service (MLS) for a minimum of five consecutive calendar days, including one weekend (i.e., Saturday and Sunday).
Insisting that the property be active on the MLS is easy to get around – agents who want to scam the system just won’t answer their phone for five days.
Lenders been requiring that short-sale participants sign an affidavit promising that the transaction is a legitimate arm’s-length deal, and has had open-market exposure. But shady realtors will sign those too – let’s face it, unless there is enforcement, rules and regs are meaningless.
But short sales appear to be winding down anyway. With lenders not threatening to foreclose, why short-sale? Defaulters will just live for free.
Currently short sales are 3.2% of the inventory county-wide:
| SD Co. Det & Att Listings | |||
| REOs | |||
| Short-sales | |||
| Non-REO/SS | |||
| Totals |
With only 204 short-sales on the market, hopefully it means we are getting closer to the end – though they will likely stay around for years as a quiet alternative to the occasional foreclosure action.
On a side note, how about that active-to-pending ratio of 6,305:6,931? Any time that REOs and short-sales amount to less than 6% of the current inventory, and there are more pendings than actives you can say the market is in pretty good shape.
Contingents are similar to pendings; they probably have roughly the same chance of closing, because pendings are less of a sure bet at higher rates/prices.
“REO properties used to trade at a 20- to 30-cent [on the dollar] discount three years ago,” says Christopher Whalen, Carrington’s managing director and executive vice president. (He also is one of banking’s more vocal risk analysts.) “Today, investors in REO properties for rent are basically paying retail, multiple-listing prices for residential assets.”
http://www.americanbanker.com/magazine/123_8/oh-reo-a-real-estate-rebound-story-1060541-1.html