Short Sales

I recently saw a short sale listing being advertised and there was an exterior photo of the house.  Parked in the driveway was a BIG speedboat.  The seller had refinanced the mortgage several times, had no equity (spent on a boat, perhaps?), and needed to sell.

Many people are not even being subtle about abandoning their obligations these days because it is commonplace to do so.  As long as borrowers are allowed to shrug and walk away, there will continue to be major challenges in the housing industry.

There are also people with legitimate hardships.  Those people did not necessarily do anything wrong; they are victims of the situation.  Because of the irresponsible actions of others, these borrowers are feeling the financial pain.  It is a basic economic law:  As supply increases, demand decreases.

As the number of homes on the market increases, the demand for all the homes on the market decreases.  As the demand decreases, prices adjust downward.  With the glut of foreclosures on the market from the over-leveraged homeowners and the “shrug and walk away” people, those who made responsible financing decisions are at risk of suffering the consequences of too much inventory and decreasing home values.

For more information on foreclosures, short sales, and loan modifications, or to order a copy of Mangled Mortgage, send a message to info@mangledmortgage.com.

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1 Comment

  1. February 27, 2009 at 10:02 AM

    […] best investors I know are spending their money on pre-foreclosures and short sales right now.  Check back periodically for updates on those investment strategies.   You can direct […]


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