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Florida Real Estate News
Foreclosures and Short Sales

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Foreclosure, pre-foreclosure and short sales news.

The mortgage foreclosure process may give you more time in your home before you have to move, home foreclosures affect your credit scores drastically. Industry experts state that a mortgage foreclosure or a deed-in-lieu of foreclosure can drop a consumer's credit scores between 250-280 points. A short sale will still show on your credit; however, it will show as "a pre-foreclosure in redemption status" and the affect on your scores will be between 80-100 points.

A pre-foreclosure sale is an agreement between a home, business, or property owner and the lender to accept a lower payment on the mortgage owed, if the property can be sold within a few months. The pre-foreclosure sale is an alternative to a foreclosure, and will potentially do less harm to a person's credit score than a foreclosure. When pre-foreclosure sales are successful, the home's former owners will be eligible to purchase a home or property within two or three years.

Not all foreclosure threatened homeowners are eligible to attempt a pre-foreclosure sale. In order for a homeowner to sell their home through a pre-foreclosure sale they must meet one or more specifications. One specification is that a home or property's value must have dropped. Another sample specification is that the homeowner may not own any other valuable properties that could be sold as collateral.

Homeowners in danger of a foreclosure may wonder if a pre-foreclosure short sale is a better way to go. A short sale takes place before foreclosure where the lender agrees to accept less than what is owned on the mortgage. One of the major issues to consider when determining if a mortgage foreclosure or a short sale is best for you is the affect on your credit scores and your ability to buy a new home in the future.

Orlando Florida April 9, 2012 - Bank of America is set to roll out a new short sale process and documents
designed to reduce the approval process to 20 days.

Feb. 13, 2012 – Foreclosures decreased by 8.4 percent or 130,000 in 2011, according to research by CoreLogic.
It appears that lenders are more cautious. Homes are entering the foreclosure process more slowly as lenders carefully scrutinize paperwork before processing a foreclosure after getting into big trouble for mishandling some foreclosures in recent years.

Also, with today’s stricter credit conditions, lenders are choosier about approving loan applicants, reserving approvals for mostly low-risk borrowers with a lower chance of default and foreclosure. Banks are also doing more loan modifications to prevent foreclosures. And when a home does land in foreclosure, banks try to process them faster or encourage a short sale. “This is the first time in a year that REO sales (those of bank-owned properties) have outpaced completed foreclosures

Source: “Homes in Foreclosure Decline by 130,000,” CNNMoney (Feb. 8, 2012)

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