Foreclosures & Short Sales
Foreclosures
Foreclosure properties also known as "Bank Owned" are an issue in the Active Adult Communities, but not nearly to the extent as they are in the regular family communities. The bank usually acts in the capacity of servicing the loan for the actual investor. The bank acquires title to the property usually by either a "Deed In Lieu Of Foreclosure", executed by the property owner, or by auction in accordance with the terms of the loan documents. The bank then sells the property to minimize further losses.
Short Sales
A Short Sale is a situation when there is more debt owed against the property than the property's value. The property owner is unable to continue to make the payments as agreed upon. In a loan default situation, or pre-foreclosure, the creditor(s) may be willing to agree to allow the property to be sold for less than the loan amount and accept less than (or short) the amount owed as payment in full. The property is sold before it appears as a Foreclosure on the banks records.
Short Sales have been a dirty word. Few ever successfully closed escrow, and those that did could take many months for the process to be completed. However, banks are now understanding that more money can be made with a Short Sale (or less lost) than with a foreclosure. Banks are in the process of changing their large Foreclosure departments into Short Sale departments. This involves substantial retraining since the process of working with a Foreclosure and a Short Sale are very different.
A few benefits of a Short Sale to a bank are:
Avoids a Foreclosure on their records
The Bank receives an incentive for completing a Short Sale
Eliminates the cost of future servicing of the loan
A few benefits of a Short Sale to the homeowner are:
Satisfies the debt for less than the full amount
Avoids a Foreclosure on the homeowners credit
May avoid a deficiency judgment if the homeowner qualifies
May limit tax liability to the IRS
The link shows Foreclosure and Short Sale properties in Sun City Grand, Sun City Festival, Corte Bella, Arizona Traditions, and Trilogy At Vistancia.
