Inventory.
That's really all we need to say. Apparently, the much-heralded "shadow inventory" is disappearing; sellers are still not all that eager to list their property unless they must--even though it's an excellent idea, because what you buy is usually even a better bargain than what you sell, if you move up in price/value.
Short sales are moving along much faster than they were, and lenders, instead of being "difficult" about the process, have actually embraced it. Foreclosures are dwindling rapidly for the moment, although there are some signs on the horizon that they will soon pick up:
Some lenders are selling off their portfolios of loans to third party lenders, who then foreclose the loans and acquire the properties. This is fairly customary in times when the market is returning to normal. If you are in the middle of a short sale, you will probably not have the lender foreclose you out. However, if you are behind on your payments and have not initiated a short sale, do not be too surprised if you get a foreclosure notice, and the lender refuses to negotiate a short sale. Many of these "new lenders" are looking to foreclose the properties out, and make more than they would through a short sale.
Much depends on the original lender's game plan--he may say, "I'm tired of all these nonpaying loans," and sell off his nonperforming portfolio to a third party lender, who then forecloses the loans out and gets the properties; he may decide to make a true effort to get borrowers involved in the short sale process. Whichever he does, the borrower is typically NOT in control of the process, even though there are real estate agents who may represent to him that the process can be controlled. The lender controls the short sale/foreclosure process.
For these reasons, if you are delinquent on your payments, you MUST call your lender right away. It may be that you will qualify for one of the government programs that are available, or you may be able to short sell, stay in your home a bit longer, and get some "move out" money. If you are not able to make your payments, don't hide. Come to the table honestly, and let your lender know what is happening, and see what you can do. Virtually every real estate and lending professional has given this advice many times, but the typical response to delinquency and foreclosure is still "run and hide." We all hate to face up to the fact that things have gone badly for us, and that we have to do a "re-set" with our lives. It's one of the hardest things to do. However, it's the best plan.
Your best advisor in this situation is a competent professional: Real estate agent (although they have a vested interest in you selling your home), accountant, attorney, loan broker/loan officer.
Your lender may be willing to help you, but their goals often differ from yours: They want to collect all they can, for as long as they can--you want to keep your home or sell it if you know you can't keep it. So your goals are quite different, which is why people often don't get help from their lender, only demands for money and threats.
The most important advice is to act immediately, and get help right away.
It's a difficult time, but you will come out of it, and recover. People do.
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