Short sales grow as a cheaper alternative to foreclosure
Los Angeles Times
By Alejandro Lazo
... Late last year, the Obama administration added incentives to get short sales done if a borrower is unable to qualify for a modified mortgage as part of the government's $75-billion effort to help troubled homeowners. Starting in April, the government will pay incentives to lenders and borrowers when a sale is completed.
Many economists view short sales as a way to address a problem that mortgage relief hasn't fixed: properties that are "under water," carrying more debt than the home is worth.
"Making short sales easier would go a long way to freeing up the market," said Richard Green, director of the Lusk Center for Real Estate. "Right now, if people are under water on their house, they are really stuck."
Short sales remain difficult. Uncertainty over home prices makes properties hard to value, lenders are understaffed and multiple loans on a home can trip up negotiations among creditors.