Short sales increasingly common in NY, NJ

August 19, 2011 06:53PM

Banks are beginning to see the benefits of engaging in short sales,
the New York Times reported, because they expect to receive higher
returns. In New York and New Jersey it has become practically the only
alternative because a court order has forced banks to restructure
their mortgage procedures, halting the foreclosure process. Short
sales are also a less stressful experience for homeowners than
foreclosures, since those take longer and have a significant effect on
the credit rating. New Jersey is the state with the
fourth-highest percentage of delinquent loans. J. K. Huey, who heads
up Wells Fargo Bank’s short sale and foreclosure division, said that
“most agree that foreclosure is not the best alternative for anyone.”

Mark Rodgers, the director of public affairs for Citibank, said his
bank provides homeowners who ask with the names of several short sale
specialists at real estate agencies in their area. Many brokers have
specialized on the short sale business, and seek out potential clients
using online computer software that processes distressed sales.

While
that service is free, the company that provides it, Equator,
encourages brokers to get certification as specialist in short sale
business through a $500 certification program. Other brokers get leads
through personal contacts or the Multiple Listing Service, which can
hold clues to distressed properties in its listing.

“The banks are
definitely becoming friendlier to deal with, especially as they
realize there’s so much shadow inventory out there that hasn’t even
reached the market yet,” said Bill Flagg, a broker with ERA Queen City
in Scotch Plains, NJ. The new business opportunity has also encouraged
brokers to be proactive, like Susanne Rhame of the Woodward Realty
Group in Middletown, NJ, who has been blogging and tweeting about short
selling. [NYT]