Written by: Norka Parodi

stock and keyYou do not have to be in real estate to know the meaning of the terms short sales, distressed property, and “underwater” mortgages. Furthermore, most people associate them with the mortgage crisis that began in the mid 2000’s. In reality, short sales are a phenomenon that occurs even during a balanced market.

I remember living in Massachusetts in 1990 when I sold my home and was left with less than a couple thousand dollars. At least my family did not have to bring money to closing, but some of my friends left Massachusetts having to pay upwards of $40,000 at closing just to sell their home. I also remember when in the early to mid 1990’s, a good number of homeowners in Sacramento, California were experiencing foreclosures when their defense contract jobs ended.

Back in those days, I recall “upside down” mortgage was the term used and lenders were reluctant to negotiate with distressed sellers. It seemed that homeowners only had two alternatives; make good on their financial obligation or face foreclosure. The thought of 3 out of 10 homes being “underwater,” however, has forever changed the financial culture of this country.

According to Bill Borda, Senior Vice President of Home Transition Services for Bank of America, defaulted loans account for 3% of the total mortgage loans in a balanced market. But in Florida, that number is 8.56% according to past year’s Mortgage Bankers Association National Delinquency Survey. however, the present percentage of defaulted loans in Florida is a steep decline from its peak of 14.5% of mortgages in foreclosure.

“Defaulted loans account for 3% … in a balanced market”- Bill Borda

Regarding to the proportion of loans in foreclosure, the mortgage bankers Association National Delinquency Survey showed that Miami has the highest rate at 10.34%, but it also had the largest decrease in it’s foreclosure rate over the past year.

Short sales and foreclosures have been and will always be the consequence of a downturn of the economy. As families today, often depend on two income earners, any event can occur that disrupts one or both of those incomes may create the possibility of facing a foreclosure.

In light of this a Realtor, or real estate agent, may not have the skills or experience to successfully manage your short sale. You need a Realtor who has the extended qualifications known as Certified Distressed Property Expert (CDPE)- My team has extensive experience helping homeowners going through financial hardship understand their options and effective methods to avoid foreclosure.

We are leaders in life changing circumstances concerning Real Estate: Short Sales, Foreclosures, Probate, and Divorces. Our team has one goal and that is helping you Open the Door to New Beginnings.

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