Freddie Mac Says: Rejecting a Short Sale Could Cost the Bank $50K Per Home

Freddie Mac CEO Ed Haldeman said Monday that last-ditch tactics to prevent foreclosure, such as short sales, have risen drastically as the government scrambles to fix the housing mess.

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.

Haldeman said banks lose more than $50,000 per foreclosed home or as much as 30-to-60% of the outstanding mortgage.

One in every 31 Nevada households received a foreclosure notice during the first quarter, more than double the national average of one in 80. Home prices there fell 12% between March 2009 and March 2010, vs. a national decline of under 1%.

Published by Stout Law Firm

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