In a panel session at the Mortgage Bankers Association’s National Conference & Expo recently, industry professionals voiced their opinion on whether or not short sales will be a driving force behind the housing recovery.
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“We’re seeing quite a bit of activity increasing in the short sale industry this year and I believe it will continue into 2014,” said Wingspan Portfolio Advisors CEO Steven Horne.
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Over the past year, short sales have increased considerably and are rapidly establishing themselves as a tool of choice for servicers. “Last year we set a new record for short sales, we passed the 1 million mark for the first time in history,” added Rick Sharga, executive vice president of Carrington Mortgage.
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However, despite its strong growth, challenges still loom with short sales.
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“Second-liens are clearly still an impediment,” Sharga stated. Oddly enough, the buyer is often an impediment, added Sharga, who says there’s often a waiting period while the buyer scrambles to gather their paperwork after the short sale is approved.
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Sharga continued, stressing that not much has been done thus far to educate short sale buyers. “I don’t think there’s a concerted effort to educate consumers about the process; and only a half-hearted effort to [educate] borrowers who’ve found themselves in distress,” said Sharga.
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This education seems to be crucial as short sales don’t seem to be going away anytime soon. With an emergence of large-scale funds that are turning homes into rental properties, more short sales seem inevitable, said Wingspan Portfolio Advisors CEO Steven Horne.
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“I think we’re going to set a new record for short sales in 2013,” concluded Sharga.
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