Short Sales Picking Up Due to HAMP Fallouts

With more borrowers falling out of the Home Affordable Modification Program, short sales are finally gathering steam. Short sales have skyrocketed in the past two months after overtaking sales of real estate-owned in January, suggesting that the government's Home Affordable Foreclosure Alternatives program kick-started the short-sale market even before going into effect April 5. Roughly 28,000 REO sales were completed in March by seven of the top 10 mortgage servicers, nearly flat from 26,000 in February, according to data provided to American Banker by Equator LLC, a Los Angeles software firm. But 55,000 short sales were done in March, up from 29,500 in February, according to Equator. Christopher Saitta, Equator's chief executive, said it will take the market some time to absorb all the distressed properties, whether they are sold as REOs or in short sales. "I think it's going to take two to three years to get through everything the foreclosure moratoriums and the economy have created," Saitta said.