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Why Banks do Short Sales

Illinois placed in the top 10 nationally in foreclosure filings for 2007 at 90,782 posted filings.  The 2006 figure was 64,310 which is up dramatically.  The 2007 number represents 1.25% of the total households in Illinois.  The national average is 1.03%.  The good news is that 98.75% of all Illinois households are NOT in foreclosure.

The high foreclosure numbers are causing fewer people to offer up bids at the sheriff's sale.  The large mortgage amounts, along with back taxes, attorney's fees and other liens are making it impractical for third parties to pick up any bargains.  The bank is forced to pick up the property.  These bank owned properties are known as REO's.  The REO properties are later sold, or auctioned at a much greater discounted rate.  Also, once the bank acquires the REO, now as owners, they take on all the carrying costs of ownership (taxes, association, utilities, maintenance).  The net doesn't get better, it gets worse.  That's why short sales take place.  The banks will loose more money later than they will on the front end.

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LYN SIMS at RE/MAX SUBURBAN (847)230-7324                

Lyn is a 20+ real estate veteran who works in the Northwest Suburban Areas of Elk Grove Village, Schaumburg, Hoffman Estates, Medinah, Itasca, Roselle, Carol Stream, Bloomingdale, Bartlett, Elgin, South Elgin, Hanover Park, Streamwood, St. Charles.

Lyn's Email:  LynSims@remax.net              www.LynSims.net

 

                       
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