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Diane Gallagher

2012 is turning into the year of the short sale

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Posted: Friday, August 3, 2012 12:00 am

I know I have said it before: is this the year of the Short Sales? Well, according to Reuters, 2012 may be the year the short sale market peaks, because of a number of factors.

Bankers, pressed by the Obama administration and their own bottom lines, realize they are better off accepting a partial payment on a mortgage than taking a home in foreclosure. Some have created expedited short sale procedures in which they will pre-approve a home for a distress sale and even pay the seller as much as $45,000 to get the deal done. Remember this does not happen everywhere and it has to come from your bank/lender.

I can honestly say; I have only seen a few that have been given that kind of money, not everyone fits the criteria and not everyone gets that much money.

Another week of record-low mortgage rates! According to the latest data released Thursday by Freddie Mac, the mortgage rates persisted on their downward course this week.

The 30-year fixed-rate average, which has been under 4 percent all but one week this year, fell to a historic-low 3.49 percent, down from 3.53 last week. That’s more than a full percentage point lower than it was a year ago when it averaged 4.55 percent.

The 15-year fixed-rate average sank to 2.80 percent, down from 2.83 last week. The 15-year rate, popular among those looking to refinance, has lingered below 3 percent for nine consecutive weeks.

Frank Nothaft, Freddie Mac Vice President and chief economist, pointed to the Conference Board Leading Economic Index, which showed the largest monthly decline in June since September 2011, as well as the drop in existing home sales and new home sales as factors for the rates continued fall.

In early July, President Obama signed into law The Biggest-Waters Flood Insurance Reform Act of 2012 as part of a transportation funding bill. The legislation extends the National Flood Insurance Program (NFIP) through September 30, 2017, and ends four years of short-term extensions that brought shutdowns and uncertainty to the real estate market. Without the five-year extension, the program would have expired at the end of this month.

California Associations of Realtors® and the National Association of Realtors® have supported the NFIP which protects homeowners in over 21,000 communities nationwide where insurance is required by law to obtain a mortgage.

Take a break and have some down time. Enjoy the Farmers Market Downtown on Thursday evenings!

Have a Great Week!

Diane Gallagher is the president of the Lodi Association of Realtors and can be reached at