Government Gears Up to Sell Your House Short
The banks won’t give you a mortgage modification, but they will sell your house for you at a loss and keep the proceeds.
Jul 31, 202050.3K Shares2.2M Views
With Obama’s much-vaunted mortgage modification program all but deemed a failure — one million applications have resulted in 31,000 modifications in the $75 billion program— the administration is set to embark on a new phase in its project to resolve the ongoing mortgage crisis. That phase involves providing banks with financial incentivesto allow you to sell your house for less than the value of your mortgage and move one.
One real estate broker is already calling 2010 “the year of the short sale,” an industry term for selling something for far less than you paid for it. Banks save 20 percent over foreclosing on a house, between legal costs and the likelihood that a foreclosed-upon-house will sell for less than the mortgaged value, while homeowners agree to forfeit their homes rather than go through foreclosure and end up broke and out of a house anyway.
The Obama administration plans to offer $3,500 incentives to sell short in order to speed up the process of putting distressed homes on the market, and a Citigroup pilot program will give homeowners a whole grand to get out of their houses so Citigroup can sell them. Banks are pushing the short-sale incentives because of the “largely ineffective loan modification plans,” made ineffective by banks’ unwillingness to do more than temporary modifications or to approve applications. Apparently, rather than enforce the rules of the $75 billion program currently in effect, the administration has decided it’s easier just to let the banks sell the houses and get on with this economic recovery they say is already here.
Dexter Cooke
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Dexter Cooke is an economist, marketing strategist, and orthopedic surgeon with over 20 years of experience crafting compelling narratives that resonate worldwide.
He holds a Journalism degree from Columbia University, an Economics background from Yale University, and a medical degree with a postdoctoral fellowship in orthopedic medicine from the Medical University of South Carolina.
Dexter’s insights into media, economics, and marketing shine through his prolific contributions to respected publications and advisory roles for influential organizations.
As an orthopedic surgeon specializing in minimally invasive knee replacement surgery and laparoscopic procedures, Dexter prioritizes patient care above all.
Outside his professional pursuits, Dexter enjoys collecting vintage watches, studying ancient civilizations, learning about astronomy, and participating in charity runs.
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