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Short Sale Plan Coming, and The Weekend Poll

The federal government may try to nudge lenders to approve more short sales soon. But will the feds really be able to convince lenders to clear the path for more of these deals? Here's an interesting snippet from the online chat about foreclosure prevention held Thursday by the Post's Renae Merle and Michael S. Barr, the Treasury Department's assistant secretary for financial institutions:

From James in Manassas: Mr. Barr, I'm a purchaser of a short sale property here in Virginia. I have waited 122 days for a response from SunTrust bank to accept my offer to purchase a home for the appraised price. I do not need any government subsidies or incentives to make this purchase.

SunTrust Bank has received 4.9 billion dollars of TARP money and yet the system is backlogged. Making loans available will do little if they can not be processed, similar to the way a car that gets 100 mpg has little value if the highway is blocked.

Can the Treasury make demands of TARP-funded banks to create a more streamlined banking operation, so that mortgages may be processed faster for the large number of short sale properties?

Michael Barr: We agree that there are real problems in the short sale market and will be announcing Treasury guidelines and incentives soon to help address these barriers.

WEEKEND READING: Are you feeling lucky? The Post's Ylan Q. Mui writes in the Saturday Real Estate section about lucky numbers and talismans that some people rely on to help sell their homes. And Dan Rafter introduces you to some would-be sellers who've decided this market is not for them.

Chat Today! The Real Estate Live chat kicks off at 1 p.m. today. If lunch plans keep you away then, you can always submit a comment early.

The Weekend Poll

This is a non-scientific user poll. Results are not statistically valid and cannot be assumed to reflect the views of Washington Post users as a group or the general population.

By Elizabeth Razzi  |  August 7, 2009; 6:00 AM ET
Categories:  Buying , Foreclosure , Loan modifications , Poll , Selling , The market , Weekend Poll  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   StumbleUpon   Technorati   Google Buzz   Previous: Choosing Bankruptcy to Avoid Foreclosure
Next: Chat Plus: Finding the Right Balance in a Remodel


Now that would be news!
"soon" "guidelines and incentives"... not to terribly promising considering it has taken, what 3? tries at loan modification to finally get one that is being acted upon...

But hope springs eternal. Says me who's now a sucker sitting in a short sale contract. In all likelihood the bank will come back with something well over our offer, and then the SS will be able to go through quickly because the listing will be able to say honestly, "bank approved for $X". So, we're the sucker that's helping the SS process along. Who knows if that will be rewarded with us actually getting this place for anything resembling our contract price. (our price is about 10%/20k under comps, but the place needs more work than those comps did, so given the added hassle of a SS I think it's a fair offer, but it's not up to me now).

Posted by: kingstowne_renter | August 7, 2009 10:21 AM | Report abuse

I don't think a short sale is necessarily a good deal for a buyer. Because of my time frame, a short sale was not really an option. I did look at one (that, as in Kingstowne renter's example, had been approved for $XX) ), and I did not get the impression that it was a better deal than regular sales. It might have been a little lower, but it was a smaller house, in need of some repairs, so I thought the price was not out of line as compared to regular sales.

Same with foreclosures. There was a house I looked at that was bank owned that got multiple contracts in days and the bidding went well above the list price, which was about the assessed value. This house was pretty good. Great kitchen, decent configuration, nice lot--generally a well-kept home. But it had a drawback as well. The basement had been turned into an apartment, with two bedrooms, a bathroom, and a kitchen, rather than configured for use by the family upstairs. But clearly plenty of people saw that it would be easier to take those walls down, and remove the stove, etc., that they were willing to bid the price up to get it.

Posted by: janedoe5 | August 7, 2009 9:00 PM | Report abuse

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