• 05
  • January

Short sales in the Tampa Bay area have increased significantly in the last year. According to the St. Petersburg Times, during November 2010 in Hillsborough and Pasco counties 3160 people tried to sell their homes for less than they owed. That was six times the number who tried to do so in November of 2009. A short sale allows a homeowner with a lender's approval, to satisfy their outstanding mortgage debt by selling their house even when the sale price is less than they owe.

Continued unemployment, divorce and other factors may cause homeowners to miss mortgage payments and begin to consider a short sale to avoid foreclosure. The option of selling a house through a short sale is often complicated by the delay in obtaining approval from the banks or investors who now own the loan.

Because so many mortgage loans during the housing boom were packaged into financial instruments and sold to investors, it is often investors that own the mortgages and must give final approval for short sales. This causes many short sales to take a much longer time to close. Sometimes short sales cannot close at all because the homeowners are not able to obtain approval to sell at the offered price.

Many large lenders are devoting additional resources to short sales, either through increased personnel or through automated systems that speed up the short sale process. With Tampa Bay home values still far below their peak in 2006, short sales may continue to increase as long as the lenders and investors are able to keep up.

Source: Saint Petersburg Times, "Rise in short sales is symbol of housing crisis' devastation" Susan Taylor Martin, 27 Dec 2010