The Banks By Being More Proactive Can Reduce Foreclosures

September 17th, 2008 | Tags: Foreclosures

Larry Riggs, the president of Frederick County realtor’s association feels that the banks can reduce foreclosures by being more proactive with the borrowers and agreeing speedily to alternatives like short sales. He is of the opinion that that the 25% increase from July to August this year would have been much smaller if the banks had been more cooperative.

RealtyTrac based in Irvine, California tracks foreclosure data. According to its report Frederick County had 143 foreclosure postings in August 2008. Although it is an increase by 25% from July 2008 it is a decrease of 4% from August 2007. But Riggs says that the data is inaccurate, as some of the inventory may have been missed out.

Riggs is laying stress on short sales and feels that the banks are side stepping this issue. They are not responding. If the banks had agreed on short sales many foreclosures could have been avoided. A short sale is when the loan amount becomes more than the market value of the house. The lender then agrees to the house being sold off short of the loan amount. Riggs elaborated that short sales have always been part of the normal foreclosure process. Some of the banks are agreeable to it but many are shying off and being difficult to negotiate with. He feels that if once the short sales pick up speed it will reduce the number of houses waiting to be sold in the real estate market and the recovery will then get a good chance to begin in earnest.

Riggs points out to the sales board in his office Re/Max Results and shows that there are more sales numbers than foreclosure listings. He adds, “And that is always a good sign, it is a healthy indicator.”

The convention of realtors had focused on viable practical solutions to revive the health of the real estate market. The calls of the hour is building up the confidence of the consumer and carry to them the message that mortgages are available. The only difference between today and yesterday is that people will have to qualify for the loans.

RealtyTrac reports that largest number of foreclosure concentrations were in Prince Georges County, Montgomery County and Baltimore City. Maryland Association of Realtors said the median price of a house in Frederick County was $298,973. In August 2007 it was $359,949.