During the last two years, home owners and real estate agents began to hear the term “short sale” more and more. While Coeur d'Alene's inventory of distressed real estate has remained relatively low compared to other parts of the country, in 2010 short sales will become a common stepping stone in the foreclosure process. They are increasing in numbers in most markets and in many communities.

There has never been anything "short" about short sales. Sellers, Buyers and their agents have waited months and months to hear answers from lending institutions.

With a new government program announced in November 2009, to be in effect April of 2010, there may be a way for hundreds of thousands of delinquent borrowers to shed their houses through a streamlined and standardized short sale process. In order to bring the various parties to the table – the homeowner, the lender that services the loan, the investor that owns the loan, the bank that owns the second mortgage on the property – the government intends to start paying cash.

Under the new program the servicing bank will get $1,000 as will a bank holding a second loan, if there is one. And as an incentive to homeowners a “relocation assistance” allowance of $1,500 will be paid.

Under the new federal program, a lender will use real estate agents to determine the value of a home and thus the minimum to accept. This figure will not be shared with the owner, but if an offer comes in that is equal to or higher than this amount, the lender must take it. The borrower must still make their case concerning the financial hardship they are experiencing but being able to sell a property “short” could provide many benefits.

For the investment pools that own many home loans there is the prospect of getting more money with a short sale than with a foreclosure.

For the borrowers, there is the likelihood of suffering less damage to credit ratings and they will also get the lender’s assurance that they will not later be liable for the unpaid mortgage value.

For communities, this plan could mean fewer empty houses, and fewer vandalized properties which serve to erode the value among neighboring homes.

Streamline and standardize the short sale process? Wouldn’t that be some positive news for buyers and sellers in the Coeur d'Alene real estate market!