So I am already seeing the affects of the new foreclosure law Act 48 and the impact it is having. I have a current short-sale going on. We were running into a foreclosure date of July 18th. I received an offer and got it submitted the week prior to the schedule auction date. I had minimal email correspondence with the negotiator, but he informed me that it was unlikely that he would be able to postpone the auction date. That was on Friday, July 15th. I emailed him back to ask if he was aware of Act 48 as this was my sellers primary residence and never heard back until Monday when he informed me that he was proceeding with the offer and submitting it to the PI company for approval. That was July 18th, the scheduled auction date. The foreclosure activity has since been suspended. I thought it was funny that no one from the bank had informed myself or the client that this was going to happen. Well I guess they are busy????
I think we will see a lot more of this. The Banks are going to shift to working with the short-sales rather than auctioning off the properties. This actually makes sense. Keep the homeowner in the home until it sells. The homeowner is paying the utilities, mowing the lawn and hopefully maintaining the home because they are trying to sell it. If the bank foreclosed on it, they would then be responsible for all this. Also, its not like the bank is going to get more for a foreclosure sale vs a short-sale, they both are going to sell for market value and in the short-sale, the bank saves themselves the cost of foreclosing and don’t have to maintain the property. I think we will see a big shift from bank owned REOs sales to short-sales, but only time will tell. Below is a good article breaking down some information and giving good resources if you want to learn more about Act 48 and how it may pertain to you.
Please do your own research on this as well. There are very heated debates against and for this new law. As we move forward, I promise there will be hurdles in the way and modifications needed to protect the interest of the consumer and the banks. Stay tuned for more updates as we start to see more and more how this new law affect the everyday life of the buyers, sellers, agents and banks.