Within the last year, the real estate short sale process has resembled a Lewis and Clark expedition - a trip into the unknown, not knowing where you were going to find yourself the very next day. And even though the process is becoming more clear, it is not getting easier.

The number of short sale attempts increases every day, driven by the equal and opposite forces of increasing mortgage payments, and falling home values, in the backdrop of a recession. Nationally, foreclosure filings have increased 97% since 2006, and median home sale prices continue to decline. Most experts expect these numbers to get worse through 2010.

Short sales are not new, but what is new is the super-sized scale that is overloading our financial and legal systems. A system that used to handle a rare short sale is now completely overwhelmed, slowed by bureaucracy, indecision, outdated policies, and a lack of leadership in the financial community.

What you need to know right now:
The short sale solution is not perfect, but it is one of the best overall solutions available
· Short sales help the seller. The seller can be forgiven their debt or a large part of it, and short sales are easier on the credit rating than a foreclosure. Forgiveness of the loan is not guaranteed - it depends on whether the bank or mortgage holder wants to get a judgment for the difference. However, the best thing for an investor or homeowner who cannot pay usually is to get out from underneath the property as quickly as possible.
· Short sales help banks recapture as much of the asset as possible, without taking ownership of a property.
· Short sales help the community. The community can avoid having another boarded up house in the neighborhood, and more quickly get someone in the house who is paying taxes.
· Short sales help other investors or homeowners. More investors or homeowners will be able to afford a short sale property's bargain price.

Lenders are becoming more responsive to this crisis. Until recently, lenders have not been willing to accept many short sales, preferring to demand what is owed and then take legal action. They seemed not to understand that yesterday's solutions do not work in a market that has suddenly lost 10 years of appreciation. Slowly they have begun to offer mortgage assistance plans, automate their communications, hire and train more staff, and they are learning how to stop treating short sellers as though they were criminals.
Progress has been made, but there is a long way to go, particularly in providing credit for buyers. Be aware that there are great differences between banks in process, programs, and collaborative attitude.

Please don't face this issue alone! If you or someone you know is facing foreclosure or looking for a short sale specialist, contact us for information and resources that can make the difference.