Higher loss severities on foreclosures will push servicers to short sales in 2011: Fitch

Not that home sales ever saw big volume increases but given the low inventory, any normal amount of homes sales pushed home values into the stratosphere.. Higher loss severities on foreclosures will push servicers to short sales in 2011: Fitch

Yes, foreclosures. our normal service offering. It definitely takes more work and effort on the agent’s part to make this work and to bring deals together, but we do a fair number of short-sale.

orous enforcement of HUD's loss mitigation requirements for servicers would have. home loans created with fha financing increased significantly, to.. property to an owner-occupant through a short sale or post-foreclosure sale, or renting out.. through the program from its inception in mid-2008 through March 2011.

In fact, short sales on homes with subprime loans incur loss severities about 20 percent lower than loss severities incurred on REO sales, according to Fitch. For now, Fitch does not expect any declines in loss severities, but moving forward, the agency expects lower loss severities on currently performing loans that fall delinquent.

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A mortgage short sale is the sale of a property by a financially distressed. obligation) in order to avoid what would amount to larger losses for the. damage to the borrower's credit score as a foreclosure would- because of.

"Banks are figuring out that having REO is much more expensive," he said. "That’s why they modify first, short-sale second and then reduce bids at a trustee sale. All those options net the bank more than REO." Higher loss severities will force lenders to resolve bad loans and liquidate REO. The realization that servicing is more expensive in.

The homepage of the servicing industry. Prices on credit default swaps (CDS) involving subprime mortgages more than doubled their increase from last month, extending the rally to an unprecedented.

Fitch: Subpar loan mod results making U.S. Foreclosures a Reality With loan modifications on a steady decline, the analysts at Fitch Ratings say the common thread running through the industry has become when will the servicer foreclose as opposed to how can a distressed borrower stay in their home.