Death of the Short Sale

I was asked just yesterday whether or not I thought the government bailout of the mortgage banking industry would put a end to short sales. My answer was unfortunately, no. The $700 billion initial proposal has already been scaled back, and we are now seeing some of that bailout that was intended for banks and ultimately home owners, now potentially going to the auto industry. In an ideal situation, the money would flow into the banking system, allowing banks to loosen lending guidelines and proactively and aggressively modify as many mortgages as possible, slowing foreclosures and ending short sales. Although short sales have been an important part of weeding out foreclosures and ultimately stabilizing the housing market, there has been a greed factor that has put additional and unnecessary strain on the housing market. The greed factor happens when seasoned professionals turn larger profits in a short sale scenario when others, banks and home owners, suffer the greatest losses. I anticipate big changes in the first quarter of 2009. The new administration has the ability to radically effect our current housing and banking meltdown. Regardless of what side of the fence you are on, hope that they get it right. You will be affected.