SAN DIEGO, CA: According to a recent study from the Amherst Securities Group, a leading dealer and market maker in mortgage-backed securities, in most cases, short sales are a more effective loss mitigation approach than Foreclosures.

The study illustrates that loss severity on Short Sales is 15% to 20% less than the average losses a bank takes in Foreclosures. Federal legislation has created financial incentive programs that now encourage banks and servicers of mortgages to pursue short sales in-lieu of Foreclosure because it looks like short sales may have a better overall impact on the economy.

In addition, a home-owner who has gone through a short sale, may buy another home in as little as 2 years with conventional financing through Fannie Mae. This would require a 10% down payment and the rates would depend on the borrower’s credit score at the time of the application. After 3 years, this same home-owner would qualify for an FHA loan with as little at 3.5% down.

Short sales, in many cases, can help homeowners sell the house, get back on their feet, and then enjoy the American dream again within two years. The idea is that the homeowners don’t make the same mistakes they made the first time around.

Many banks and mortgage servicers are now passing on the Federal incentives. These Banks are offering cash for cooperation for up to one percent of the homes sale price in order to encourage struggling homeowners to cooperate with a short sale, versus letting the property go to Foreclosure.

For information about short sales, or your home mortgage situation, please feel free to contact the Experts at: 619-309-8011, or email at: Info@DanneckerAndAssociates.com