SHORT SALES ARE BETTER THAN REOS

It is a simple fact that short sales realize more money for a lending institution than can be realized by the sale of the property after foreclosure. When a lender sells a property after foreclosure the property is described as a REO. Lenders have been slow to dedicate sufficient resources to staff short sale departments and thus response times are woefully slow. John McGeough and Anthony Lamacchia, founders of McGeough Lamacchia Realty Inc. traveled to Washington, D.C., last week to educate policy makers on the benefits of short sales. 

McGeough Lamacchia Realty is a full-service real estate firm in Waltham, Massachusetts, specializing in short sales. The company’s two principals conducted meetings with officials at Capitol Hill, the FDIC, the U.S. Treasury, and the National Association of Realtors.

Their testimony demonstrated the  increase in revenue experienced by banks who approve short sales as compared to REO proceeds.  According to the analysis, if one-third of the 94,428 lender-owned properties in the sample area — or 31,161 properties — sold as short sales, lenders could gain an additional $1,547,305,687 in revenue.

“Considering all of the political attention in our country over the debt and the budget, promoting short sales should be a high priority for all of our lawmakers in Washington,” said Lamacchia.

Clearly, the lenders should focus more of their effort on short sales in order to reduce the inventory of defaulting properties and resurrect the stalled real estate market.