Silicon Valley Real Estate Investor

Do you remember the game of “chicken”? This usually takes the form – at least in the movies – of two guys in cars racing at each other at full speed, heading for certain mutual annihilation. Whoever swerves first loses faces as the coward who flinched first, and the person who doesn’t swerve is considered [...]

Over on his blog, Dr. Housing Bubble does a really interesting job in explaining exactly how the Home Affordable Modification Program (HAMP) is NOT working as expected. Here are some basic numbers:

About3 million homeowners would qualify
About 500,000 loans in the trial modification phase (about 1/6 of all eligible)
Of these only about 3% seem to have successfully converted to permanent modifications!

What is a short sale? To keep it simple, we can define a short sales as a scenario where a lender agrees to accept less that what is owed on a mortgaged property in exchange for considering the debt satisfied. If a bank approves it, it is because for them it presents a better alternative than taking the house through the foreclosure process and selling it into the current open market. We’ll cover this topic in greater detail later on.

The main advantage to buying on a short sale, of course, is the ability to buy discounted property, without the constraint of what the current lien on the home is.

However, there are certain disadvantages, too …