San Diego is one of the most wonderful cities in the world, so it is not hard to understand why San Diego real estate is so popular, and expensive. San Diego is a coastal city in the Southern part of California and is home to over one million people. San Diego is the second largest city in all of California and people come from all over the world to purchase San Diego real estate.
The geography of San Diego is one of its most attractive features, full of deep canyons that separate all of its mesas. The layout of this city is so great because these canyons create literal gaps between towns and neighborhoods, so it gives it that segmented feel that is hard to find in big cities. Downtown San Diego is a very popular urban area, home to many young professionals. It is located right on the San Diego Bay and is a short drive or walk from many of the citys main attractions. This makes it a very attractive area to buy San Diego real estate for all types of different people.
Downtown is very close to Balboa Park; a park that contains a variety of cultural attractions including museums, theaters, gardens, shops, and restaurants. This park is also home to the renowned San Diego Zoo. The San Diego Zoo is one of the largest and most progressive zoos in the entire world. It has over four thousand animals and over eight hundred different species. All of these things add up to make downtown a hot place for San Diego real estate, but also a very expensive one.
For those who cannot afford to purchase a piece of property in the downtown area, they usually head up north to look at San Diego real estate. Generally, the further you get away from the coast and the water, the cheaper the property is going to be. There are a lot of beach and coastal towns like Ocean Beach, Mission Beach, Pacific Beach and La Jolla. As you head further up the coast you have towns like Encinitas and Carlsbad. These are beautiful areas, but the San Diego real estate is incredibly expensive so it makes it a very difficult area to purchase in.
Towns like San Marcos, Escondido and Temecula are very popular places for San Diego real estate because they are slightly inland, but still a short drive away from the beach. San Diego real estate has a niche for every income bracket, so whatever budget you are working with, San Diego has something for you.

Going Direct with Bank for Modification – 22% of Mortgages Default – San Diego is a post from: Troubled Property Solutions | Loan Mods | Short Sales call 1-619-631-4546

Mortgage modifications in San Diego and nationwide under the government’s HAMP or Home Affordable Modification Program have resulting in about 11% of the modifications falling two months behind in their payments in San Diego and elsewhere, according to a banking regulators’ report issued in September.  Lender-direct modifications result in more than 22% of San Diego loans redefaulted.  The difference between the HAMP and non-HAMP modification known: HAMP modifications reduce a borrowers’ monthly payment by an average of $608, while bank modifications lower it only by $307, including in San Diego. “There is a correlation between sustainability of payment and the reduction in the payment,” said Joe Evers, deputy comptroller at the Office of the Comptroller of the Currency, which put out the report along with the Office of Thrift Supervision.

Under HAMP, eligible borrowers can have their monthly payments lowered to 31% of their pre-tax income as long as its more profitable for the bank to modify the loan than to foreclose. Make note of this – while you may qualify if the bank/investor can make more money now by foreclosing, then it won’t matter if you qualify or not – they will just foreclose. The federal government pays servicers an incentive to participate in the program, but these incentives may not be enough.  Also, proprietary bank modifications are outpacing HAMP adjustments by more than 2-to-1. Many troubled homeowners are falling out of the government program and 44.5% of them are receiving bank modifications. Housing counselors have been wary of direct bank modifications, mainly because there is not a lot of information about them. They caution homeowners to make sure they understand the terms of the adjustment. A Chase spokesman said HAMP is always the first program the bank considers for troubled borrowers “because it lowers the payment more than most other programs.” If they don’t qualify for HAMP, they are reviewed for a proprietary modification.

One small new condition that most banks are adding to the remodified mortgage/contract is that the homeowner will agree to waive all rights to legal remedies after the loan modification is signed.  What does that mean?  It means that if the bank has defrauded you in any way such as charging you illegal fees at closing which will cost you thousands of dollars extra over the life of the loan, you have just given up your legal rights to  to rectify that fraud.  Homeowner beware!!!

VA loan after a short sale is a post from: Troubled Property Solutions | Loan Mods | Short Sales call 1-619-631-4546

You can buy a home with a VA Loan 2 years after a short sale.

Get a VA Loan after a Short Sale

Short Sales in San Diego – Wells Fargo is a post from: Troubled Property Solutions | Loan Mods | Short Sales call 1-619-631-4546

The email expert below is from an email many professional in the Short Sale Industry have received recently.

We at Troubled Property Solutions have seen this first hand, on Friday we lost one of our Wells Fargo Short Sales.
We had a great offer from a First Time Home Buyer,the paperwork was all in place but the the foreclosure sales date was Friday Sept 17. In the past we have had no problem postponing the sale but this friday was a shock to us also.

We knew this was coming for some time but we thought yeah we have heard this before.

Moral of this story, if you really do want successful short sale with Wells Fargo whether itbe here in San Diego County or any other part of the country don’t wait until the last minute.

Get you short sale package together early and take a proactive approach to saving yourself from foreclosure.

If you are receiving this email, I currently am working on your short sale file or have worked on your file in the past few months. PLEASE READ THIS WHOLE EMAIL AND FORWARD TO ANY PARTIES WHO MAY BE WORKING ON A SHORT SALE FOR WELLS FARGO.

Due to recent industry changes, we at Wells Fargo will no longer be granting any extensions for short sale close dates or postponing foreclosure/trustee sale dates. If you were issued an extension letter dated 9/14 or earlier, those extension letters will be honored, but no further extensions will be granted. Files must close by expiration date on the original approval letter or they will be removed. If your approval expires 9/15 or 9/16, you will have 48 hours to get me the final HUD for approval and close.

Please let me know if you have any questions! Thank you!

Bank Lies: Extend and Pretend on Loan Modifications is a post from: Troubled Property Solutions | Loan Mods | Short Sales call 1-619-631-4546

It is now coming out in the open that banks as well as the government are just stringing homeowners along in the loan modification process. 

For better solutions contact us at 760.512.0438 or 619.631.4546.

Government Tactic: Help Banks by Lying to Homeowners
Huffington Post Sept 20 2010

Last April, when I visited the Treasury, I told the Deputy Director of the National Economic Council, Diana Farrell, that the reports treasury was putting up on their web site touting the success of HAMP were crap. I said that in front of thirty people in a Treasury briefing room and she blew me off. “We’ll take that under advisement,” Farrell said.

Three month later Treasury announced that those same reports were in fact crap. According to Treasury officials they’d been relying on Fannie Mae to compile the reports and Fannie Mae surprisingly didn’t know what they were doing — at least not when it came to generating accurate and honest reports.

“The error caused inconsistent reporting of permanent modifications during the snapshots reported. These omissions have impacted our previous analysis… with respect to the performance of HAMP permanent modifications,” Treasury spokesman Mark Paustenbach said.

Fannie Mae knew full well what they were doing however, when they used the Making Home Affordable program to their advantage to sink struggling homeowners, rather than help them as the program was supposedly intended to do.

According to a whistle blower in a recent report on NPR :

“Fannie Mae concentrated on the work that made money for Fannie Mae: giving new applicants ‘trial modifications’ — a few months of reduced mortgage payments.

“Those applicants are meant to be moved from trials over to five-year relief plans. But Fannie made money on the trial modifications — and thousands of homeowners got stuck there.”

To add to the homeowner’s stress and assure Fannie Mae of a continued open season on American Families, Executive Vice President for Credit Portfolio Management, Terence Edwards issued an outright threat to homeowners, creating a new rule punishing anyone who stops paying their mortgage and walks away from their home by not allowing those who choose that path to get a Fannie Mae loan for seven years.”

So not only did Fannie Mae purposely string homeowners along with no end in sight, and draining savings and causing millions of people sleepless nights while they wait for the shoe to drop, they essentially closed the exit to the burning building while they lit the wick.

I also wrote another post in January called “Loan Modifications: A $4 Billion Con Game” in which I accused banks and servicers of using HAMP, the Administration’s loan modification program, to bilk struggling homeowners out of what little money they had before inevitably foreclosing. A tactic referred to as extend and pretend. In an article by the same name in Huffington Post earlier this month, a Merrill Lynch/Bank of America analyst is quoted as saying, “We have asserted many times in the past that the program has both an explicit goal (help 3-4 million borrowers) and an implicit goal (make liquidations orderly).”

John Burns, a real estate consultant quoted in that same article had this to say:

This is nothing more than a fully documented version of the same garbage that took down the banking system two years ago, and this time the federal government rather than Countrywide and New Century are underwriting it. Almost all of these borrowers will eventually re-default.

It is very obvious that the architects of HAMP are short-term focused, and are tricking us into thinking they are solving the problem by calling these permanent modifications. Until these loans are renamed, let’s call them ‘Liar Loans 2,’ except this time the liar is the Bank of the United States rather than the borrower because this modification is anything but ‘permanent’. We do believe that stabilizing home prices and the banking system are critical to the recovery of the U.S. economy, but let’s at least tell the truth about what is being done.

I’m not implying that I knew more than anyone else. I’m saying that even I could see this coming. A lot of us did. Martin Andelman’s been writing about this for some time, as has Steve Dibert, Jorge Newbery, and Denise Richardson. Jack Wright and Mike Dillon have been warning about this for nearly eight years. None of us are prophets. All we had to do was pay attention and know that the banks, particularly when it comes to helping or screwing American families and homeowners, will always choose screwing when given a choice.

The most recent and surprisingly disgusting blow came last week, when Treasury officials spoke candidly and with the cowardly shroud of anonymity to reporters and bloggers from different publications. Here’s a quote from HuffPost’s Shahien Nasiripour’s detailed article on the meeting:

The official touted the ever-growing pipeline of homes likely to enter foreclosure as a success in the administration’s fight to stem the rising tide of home foreclosures. It’s taking longer for homes to enter foreclosure, and it’s taking longer to evict homeowners once they enter foreclosure. The so-called “shadow inventory” of homes — those with severely delinquent mortgages, in foreclosure or already repossessed that have not yet been put on the market — has significantly grown since the administration took office and is estimated to range from 5 to 7 million homes. Through June, borrowers in foreclosure have been delinquent for an average of 461 days before being evicted from their homes, according to Jacksonville, Fla.-based data provider Lender Processing Services.

That’s a good thing, the official said, because it gives the market time to absorb these homes gradually — without leading to a dramatic drop in home prices. While analysts disagree — prices will decline when those homes flood the market, which many, like Mark Hanson, a housing industry analyst based in California, believe to be a virtual certainty — the official pointed to the futures market where traders are betting that home prices will remain stable through the fall of 2014.

In other words, it was a good thing to bilk homeowners out of a few more months of payments by giving them false hope and lying to them about the possibility of permanently modifying their loan, knowing all along that the modification is never going to happen –what the analyst from Bank of America so aptly described as an “implicit goal.”

When President Obama delivered his speech in Arizona in February, 2009, nowhere in the speech did he come close to implying that this plan was intended to help the banks and servicers get more money out of homeowners before taking their homes. What he said was, “This will enable as many as three to four million homeowners to modify the terms of their mortgages to avoid foreclosure.” It wasn’t followed by, “…for a couple of months.”

Here’s one of the more egregious statements to come out of this discussion (also from Nasipour’s article):

One of the reasons why HAMP has been effective ties back to the foreclosure pipeline. The official said that because some 1.2 million homeowners entered the program and immediately benefited from a trial period of lower monthly payments, not only were their foreclosures delayed but they also received what was essentially a tax cut of more than $500 a month — all without cost to the taxpayer, the official boasted. Even though nearly half of those borrowers have been booted from the program, they still benefitted from lower monthly payments courtesy of the Treasury Department with the cost borne by lenders and investors of those mortgages. Plus, at the very least, those homeowners got a chance at a permanent modification, the official said.

The problem with the Treasury guy’s statement (aside from the obvious fact that he has a crystal clear view of his own colon), and something he fails to mention is that the $500 savings is not a savings at all and hardly a tax cut. Unless by tax cut he means money you’re going to have to pay back. If that’s the case I guess we’ll be getting all the money back from the Bush tax cuts.

Here’s what really happens: The trial modification lasts three months according to the rules. Banks and servicers string the borrower along for longer than the requisite three months, sometimes going as long as nine months. At one point, after the homeowner has made all the payments on time at the lower monthly rate fully expecting to be granted a permanent modification the bank pulls the rug out from under them and denies the modification. They give no reason for this and claim that they are under no obligation to provide one. At this point the mortgage goes back to the original terms and amount and here’s where the “tax break” argument falls apart. The homeowner now owes the difference between the trial payments and the original payments. So a six month trial modification with a $500 “tax break” is now a $3000 bill on top of the original unaffordable monthly payment. In addition, servicers will add monthly charges, late fees, and reports to credit agencies further burying the homeowner who is now broke, humiliated, and desperate. In many cases, like my loan with Ocwen for example, the trial payments never get recorded or applied to any of the interest or principal – they simply disappear.

“Being in a trial modification if you don’t get a permanent modification is worse than having not been in a trial modification. Period,” said Diane Thompson, an attorney with the National Consumer Law Center to Probublica. Worse yet, people “may have a hard time finding alternative housing because some renters check credit scores,” she said.

There are hundreds of stories at shamethebanks.org from homeowners who have had this happen to them. In my case Ocwen Bank, who services my loan, has added close to $30,000 to the original principal on a home that’s worth $150,000 less than it was three years ago when I bought it. I have no paperwork itemizing the junk fees; have not received any paperwork confirming whether or not I’m still in the trial or if my loan has in fact been modified despite having made all of my payments on time since November 2009.

Add to that the staggering numbers behind underwater homes, the plummeting sales figures, estimates that home values will continue to drop another 20-30 percent, parasitic lawyers are lining up to make a fortune out of taking people’s homes, and that homes won’t regain their values for another 20 years, one has to ask if it’s really worth fighting for a house.

In light of the news from the meeting at Treasury and to quote Eschatonblog’s Artios, “Conning homeowners by announcing a government program designed to help them when in fact it was designed to help the banksters is, in my world, ‘cruel’.”

The only real strategy a homeowner has is to apply for a loan modification using the same strategy the banks, servicers, and apparently the Administration, and Treasury have used against them. Extend by applying for a modification and then pretend that they’re going to pay and want to stay in the house. Use the money saved by not paying the mortgage to look into alternative strategies.

After accepting the simple and painful fact that holding on to their home is the least likely scenario, there are a few avenues worth exploring. Have a comprehensive compliance and fraud investigation done on the loan by a reputable investigator; have an NPV test or equivalent report like the REST Report generated that shows the investor that the servicer is in fact not working on their behalf or best interest; look into a short sale leaseback program; and hire a reputable attorney that knows how to interpret the numbers and information from these reports and who specializes in foreclosure prevention.

The other alternative is to stay in the house for as long as you can, saving as much money as possible and leave when the Sheriff tells you it’s time to go.

What is most disturbing about the meeting with Treasury and the things that were said, or more accurately admitted, is that an argument could easily be made that this was an overt act by the administration to mislead and trick the American homeowner. That our government has been complicit in the bank’s ravaging of the bank accounts, retirement, and investments of nearly five million people.

San Diego Bank Foreclosures Up Significantly From Last Year is a post from: Troubled Property Solutions | Loan Mods | Short Sales call 1-619-631-4546

According to RealtyTrac, lenders are no longer delaying the sale of homes.  Over 95,000 properties have been reposessed nationwide last month, with a significant number of those in San Diego and Southern California.  What does this mean?  It means that Loan Modifications are not working. 

The only good news is that fewer than 1/3 of those homes that are foreclosed upon are going back on the market – which means that people are staying in the homes, even after foreclosure.

LOS ANGELES (AP) — Lenders took back more homes in August than in any month since the start of the U.S. mortgage crisis.

The increase in home repossessions came even as the number of properties entering the foreclosure process slowed for the seventh month in a row, foreclosure listing firm RealtyTrac Inc. said Thursday. In all, banks repossessed 95,364 properties last month, up 3 percent from July and an increase of 25 percent from August 2009, RealtyTrac said. August makes the ninth month in a row that the pace of homes lost to foreclosure has increased on an annual basis. The previous high was in May.

Banks have been stepping up repossessions to clear out their backlog of bad loans with an eye on eventually placing the foreclosed properties on the market, but they can’t afford to simply dump the properties on the market.Concerns are growing that the housing market recovery could stumble amid stubbornly high unemployment, a sluggish economy and faltering consumer confidence. U.S. home sales have collapsed since federal homebuyer tax credits expired in April.

That’s one reason fewer than one-third of homes repossessed by lenders are on the market, said Rick Sharga, a senior vice president at RealtyTrac.

“These (properties) are going to come to market, but very slowly because nobody wants to overwhelm a soft buyer’s market with too much distressed inventory for fear of what it would do for house prices,” he said. As a result, lenders are putting off initiating the foreclosure process on homeowners who have missed payments, letting borrowers stay in their homes longer.

The number of properties receiving an initial default notice — the first step in the foreclosure process — slipped 1 percent last month from July, but was down 30 percent versus August last year, RealtyTrac said. Initial defaults have fallen on an annual basis the past seven months. They peaked in April 2009. Still, the number of homes scheduled to be sold at auction for the first time increased 9 percent from July and rose 2 percent from August last year. If they don’t sell at auction, these homes typically end up going back to the lender.

More than 2.3 million homes have been repossessed by lenders since the recession began in December 2007, according to RealtyTrac. The firm estimates more than 1 million American households are likely to lose their homes to foreclosure this year. In all, 338,836 properties received a foreclosure-related warning in August, up 4 percent from July, but down 5 percent from the same month last year, RealtyTrac said. That translates to one in 381 U.S. homes. The firm tracks notices for defaults, scheduled home auctions and home repossessions — warnings that can lead up to a home eventually being lost to foreclosure.

Economic woes, such as unemployment or reduced income, are now the main catalysts for foreclosures. Lenders are offering a variety of programs to help homeowners modify their loans, but their success rates vary. Hundreds of thousands of homeowners can’t qualify or fall back into default.

The Obama administration has rolled out numerous attempts to tackle the foreclosure crisis but has made only a small dent in the problem. Nearly half of the 1.3 million homeowners who enrolled in the Obama administration’s flagship mortgage-relief program have fallen out. The program, known as Making Home Affordable, has provided permanent help to about 390,000 homeowners since March 2009.

Regardless, many troubled borrowers have seen their efforts to get a loan modification stymied. Larry Book of Winter Garden, Fla., was one packet away from a permanent loan modification from Chase under the Obama administration’s foreclosure prevention plan after more than a year of back and forth and one failed attempt. But his modification never went through. Instead, his loan was transferred from Chase to IBM Lender Business Process Servicers in July and he was told he owed $9,562.62 and must bring his mortgage current by Sept. 15 or foreclosure proceedings will begin. “It just becomes too exhausting,” Book said about the modification process. “That’s why some people walk away. But I’ve invested too much and given up too much to just let it go.”

AP Real Estate Writer J.W. Elphinstone in New York contributed to this report.

Short Sales Up Significantly Due to Loan Mod Failures is a post from: Troubled Property Solutions | Loan Mods | Short Sales call 1-619-631-4546

Short Sales Rise 600% from 2008

The number of Freddie Mac  short sales has increased 600% from two years ago according to Freddie’s CEO Ed Haldeman, as lenders look to dampen the impact of foreclosures hitting the marketplace. In a statement put out this week, Haldeman said Freddie Mac is doing everything it can to prevent more foreclosures, and that short sales are becoming an ever-popular tool in situations where foreclosure is imminent and modifications have failed. That number could increase as the Home Affordable Foreclosure Alternatives (HAFA) program takes hold. The Treasury Department launched it in April to provide cash incentives to servicers for conducting short sales and deeds-in-lieu of foreclosure.

RealtyTrac, an online foreclosure marketplace, is even preparing a short sale report to go long with its usual foreclosure report every month. It won’t be available until the end of 2010 however. “Foreclosure alternatives like short sales and deeds-in-lieu help borrowers to avoid the stigma of foreclosure, shorten the waiting period before they can buy a new home, and may inflict less damage on their credit reports,” Haldeman said. While short sales still add to the housing supply and can put pressure on local home values, they often avoid the lack of maintenance or damage foreclosed homes often display. Since the middle of 2008, Freddie Mac reported total losses of $84.4bn, according to its quarterly reports. The company’s plight has forced a directive from the Federal Housing Finance Agency (FHFA), its conservator, to de-list its and Fannie Mae’s common stock from the New York Stock Exchange.

Loan Modification Re-Default Rates Rise to 75% including in San Diego is a post from: Troubled Property Solutions | Loan Mods | Short Sales call 1-619-631-4546

The Odds Are Stacked Against the Homeowner:

Most San Diego homeowners want to keep their home, and thus pursue a loan modification but will find it ultimately doesn’t work. 

But according to a recent report approximately 65-75%  of  borrowers who have had their mortgages modified through a government-sponsored program will redefault within 12 months.  Between 65% and 75% of loans that are modified through the Home Affordable Modification Program(HAMP) but not backed by the federal government are likely to go bad, according to the report released by Fitch Ratings, a N.Y.-based credit-rating agency. The main reason these borrowers continue to struggle is that HAMP does nothing to solve the rest of their debt problems, the report added. “Many of these borrowers still have very heavy levels of other debt,” said Diane Pendley, a Fitch managing director, “auto loans, credit cards and other expenses.

The HAMP modifications reduce housing expenses down to 31% of income but do not touch these other obligations.” Currently, according to the Fitch report, about half of prime borrowers who lose their homes now do so through foreclosure. The other 50% go through short sales, in which they sell their homes for less than what they owe the bank, or deed-in-lieu, a transaction where the bank takes back the property directly and forgives the outstanding balance (what we call the bank’s “Give Us Your House” Program). The servicers have been encouraged to rev up their short sale engines by the Treasury Department, which runs HAMP and its sister program, Home Affordable Foreclosure Alternatives (HAFA), which provides cash incentives to the parties who agree to short sales.  Now, when borrowers re-default on HAMP mods or other bank workouts, banks are much more likely to offer help to execute a short sale or deed-in-lieu.  Keep in mind that a loan mod is considered a refinance, and in California is no longer protected against the anti-deficiency judgement laws that California offers for purchase money loans.

So if you think the terms of the loan mod are not going to work out for you in San Diego or in California, consider whether you want to sign those loan mod docs and expose yourself to a deficiency judgement if you re-default.

Short Sales in San Diego Lose Banks Less Money is a post from: Troubled Property Solutions | Loan Mods | Short Sales call 1-619-631-4546

Short Sale is Better for Banks than a Foreclosure in San Diego

According to DSNews.com the Loss Severity on Short Sales are 13% Lower than REOs, including in San Diego, confirming what we have known for the last 3 years!

Over the past year, the mortgage risk analysis firm Clayton Holdings says it has witnessed an overall increase in short sale activity. Because of the growing emphasis on keeping borrowers out of foreclosure, servicers are becoming more inclined to employ alternative loss mitigation strategies. And Clayton says the added benefit to servicers is that loss severities for properties sold through short sale are 13 percent lower than loss severities for REO sales. The analysts at Clayton Holdings examined performance indicators across nine servicers’ internal proprietary short sale programs, from October 2009 to March 2010. In addition, the data showed that short sales cost bondholders about half the amount in fees and advances as REO sales, saving roughly $16,000 per sale.

Clayton says servicers with the lowest loss severities for short sales employ a variety of strategies including outsourcing, utilizing dedicated short sale teams, working directly with local broker networks, and setting list prices based on historical and geographical REO net proceeds.

More Short Sales Coming in San Diego is a post from: Troubled Property Solutions | Loan Mods | Short Sales call 1-619-631-4546

Loan modifications are not working – so banks are moving towards short sales to solve the mortgage crisis

Diana Olick – Big Banks Move to Short Sales, but Will It Help Housing?

“Earlier this week a top executive at Bank of America told an REO conference in Dallas that the lender would be focusing more on short sales than ever before. At first hearing this, I assumed it was because of the government’s Home Affordable Foreclosure Alternative Program, which provides cash incentives to servicers and borrowers for short sales and also streamlines the process, but of course there’s way more to it than that. Said Bank of America exec, Matt Vernon, whose official title is National REO, Short Sale and Deed in Lieu Executive (his childhood dream title I’m sure), granted me an interview this morning, and was pretty clear as to why B of A is pushing these alternatives. The big difference, he says, is that BofA, as well as some other big banks, are changing the model from reactive to proactive. In other words, instead of waiting for a borrower or real estate agent to approach the bank with an offer for a short sale, they are using a “cooperative approach, with homeowner, Realtor and servicer on behalf of investor, working to move that property through the process. All three of the interested parties holding everything together,” Vernon explains. ”

Olick continues: “So the servicer sets a minimum value for a short sale and then the borrower and Realtor go out and find a buyer. When they do, the process then moves far more quickly because it’s already approved. Of course there’s always the financial incentive as well. With so many borrowers either falling out of or not qualifying for the modifications, a huge flood of properties are moving to REO (bank owned). A report from Clayton Holdings finds short sales cut risk severity by 13 percent more than REO sales. And in some states where the foreclosure process is more lengthy, short sale loss severities can be as much as 26 percent lower than REO loss severities. “I would say that’s generally accurate in what we see,” agrees Vernon. “It really comes down to time. The quicker you can facilitate the property moving.” The good news is, that will cut down on foreclosures. The bad news is that short sales, like it or not, are comps. They sell for less, and consequently bring down the values of properties around them.”