Short Sales Higher, Prices Lower

Foreclosures and short sales (when the home is sold for less than the value of the mortgage) accounted for 47.7 percent of sales, in a three month running average measured by Campbell/Inside Mortgage Finance. That's the 25th month in a row that distressed sales have topped 40 percent of the market.

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That share is likely to grow, as FHFA last week announced it was directing the two mortgage giants to "develop enhanced and aligned strategies for facilitating short sales, deeds-in-lieu and deeds-for-lease in order to help more homeowners avoid foreclosure." It includes a requirement that mortgage servicers review and respond to short sale requests within thirty days... The FHFA is requiring the two make final decisions on these sales within 60 days. Previously, short sales could take up to a year and even beyond, with buyers often dropping out in frustration.