By: Melissa Flexsenhar
Are we in for another foreclosure wave? In my opinion no, even with the moratorium on foreclosures ending June 30, 2021 people are in a better position now the economy has opened back up.
According to the Bank of America’s CEO Brian Moynihan in a yahoo finance article he stated “the number of people with payment deferrals has dramatically reduced.” Most homeowners have enough equity that even if they are unable to make the payments on a their mortgage, they are able to sell, taking profits and avoiding foreclosure.
Homeowners also have other options if they don’t have the equity to sell. A deed in lieu is just what it sounds like, you deed your home over to the bank in lieu of them having to go though the costly foreclosure process. A short sale is another option, it requires a little more work on the part of the homeowner but is a great option. A realtor familiar with how short sales work or an attorney can help you with this process. The home goes up for sale and once an offer is received you provided the bank with required documentation and letters of hardship explaining why you can’t make the payments, if the offer is reasonable and inline with the current market in most cases the bank will approve the sale and payoff at an amount lesser that what is owed. The process for approval usually takes 30-60 days. Once approved the sale moves forward like any other sale.
The benefits to a short sale vs letting the home foreclose is in most cases a shorter wait time until you can get another mortgage and less damage done to your credit. Wait times to get a new mortgage after foreclosure range from 2 to 7 years depending on the loan type where short sales range from 2 to 4 years.
For most homeowners, those options aren’t needed, as noted many have the equity to sell even if they are unable to make their monthly payments anymore. We are currently experiencing a very strong sellers market with homes going for at or over full price when placed on the market usually with multiple offers to chose from. We have about 1 month of inventory on the market. A normal balanced market is approx. 7 months worth of inventory. This lack of inventory has driven prices up an average of 32% in the last year alone.
According to business insider there are 900 people a day moving to Florida from high tax states like New York and New Jersey. The number of people that call the Fort Myers area their second home is on the rise too. According to NAR Lee county is the number one place for people to own a second or vacation home. We have a whopping 90,792 with that number going up about 10% year over year. With this huge increase of people moving into the area there is no shortage of buyers that want to buy making it very easy for any homeowner including those in distress to sell with a line of buyers waiting to make an offer.
Melissa Flexsenhar with CornerStone Coastal Properties has been a Real Estate Adviser since 2002. She specializes in helping her clients in the purchase and/or sale of real estate in Fort Myers, Cape Coral, Estero, Bonita Springs, and Naples, Florida. Melissa Flexsenhar is one of the leading short sale specialists with a 98% success rate. Specializing in all types of real estate, from investments all the way to luxury estate homes. If you are looking to buy or sell, contact Melissa at: 239-839-2690.