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Short sale vs Foreclosure Loss Data
2 Comments · Posted by admin in Bank Owned, Foreclosure, REO, Short Sales
This data comes from an interview with Bank of America, Dave Sunlin, senior vice president for foreclosure and real estate management division.
The entire article is here:
http://www.bloomberg.com/apps/news?pid=20603037&sid=a_NoPFp0r8Y4
Cutting Losses
Losses on prime loans going through the foreclosure process averaged 49 percent versus 34 percent for a short sale as of Oct. 1, according to a Nov. 10 report by Laurie S. Goodman, senior managing director of Amherst Securities Group LP. For subprime loans, losses averaged 73 percent for a foreclosure compared with 59 percent for a short sale, Amherst reported.
“The loss severity of short sales is lower but it’s not low,” Goodman said.
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Joe Stradcutter · December 9, 2009 at 4:41 pm
Given the fact that even the best short sales take 4-6 months from listing to sale, it would seem their losses would be even less if they would delegate more resources to short sales. Let’s try to cut the entire process down to 3-4 months and watch their profits increase.
Darren Ahearn · December 9, 2009 at 11:30 pm
Yeah- maybe that new Voluntary rule where the banks can make a decision in 10 days coming in April 2010?? I dont see them shortening things from the 4-5 months- I know they do not think logically and are praying that the short- sale storm will pass after all these years and go back to normal. That would be 4% or less in this class– but I’m afraid that there is a general attitude in those loss mitigation departments that says, “SO WHAT IF THIS HAPPENS OR NOT” !! Sometimes I think it would be better to take away the short sale decision power from the lenders and drop it in the laps of the idiots i.e Barney Frank, Chris Dodds and Harry Reids of the world who started this mess- let them feel the heat once and for all–