Updates on Short Sales from the CDPE Momentum Convention

At the end of May, I was fortunate to go on a road trip with Davidson Realty’s Short Sale Coordinator Cindy Vaughn to Tempe, AZ to attend the Certified Distressed Property Expert (CDPE) seminar. We had a great time and learned a lot. There were many great speakers and I wanted to share some of the comments I found most interesting.

Rick Sharga from Realty Trac Inc. talked about three waves of foreclosures. The first wave of foreclosures occurred when employment was strong and the economy was growing. These foreclosures were caused by the sub-prime loans. The second wave of foreclosures was caused by unemployment. They estimate that there is 1 foreclosure for every 6 to 10 jobs lost. The third wave of foreclosures is mainly due to Option Arm loans resetting. Many people will see payments rise by $1,000 to $1,500 per month. The resetting Option Arms will peak in 2011.

Matt Vernon from Bank of America spoke about improvements to the short sale process using a new technology called Equator. Just to give you an idea of their volume of short sales, in March 67,000 short sales were initiated and 64,000 decisions were made. They have made major improvements in the time frame for approvals; however, Matt pointed out that only about 10% of the loans are owned by Bank of America. Most of the approvals have to be made by an investor and some investors respond more timely than others. Read more