Short Sales Continue to Drive Losses Lower – NMP Skip to main content

Short Sales Continue to Drive Losses Lower

Mortgage News Ticker
Apr 16, 2013

Loss severities for U.S. RMBS will continue their slow decline this year due in part to the increased use of short sales, according to Fitch Ratings in its latest mortgage market index. Fitch's Loss Severity Index improved to 64.2 percent for the first quarter of 2013, down from 67.5 percent in the first quarter of 2012. Drivers of the improved loss severity rate include increased short sale percentages, fewer servicer advances on missed payments, and increased home prices. "Along with home price improvements, the increased use of short sale liquidations is now helping to reverse the trend of rising mortgage loss severities," said Director Sean Nelson. In a short sale, the servicer allows the borrower to sell their property on their own for less than the mortgage amount. Short sales typically result in higher recoveries on distressed loans. "Timelines to liquidation are much shorter compared to the full foreclosure process and the sale avoids the stigma of being a bank-owned property," said Nelson. Fitch's Loss Severity Index is published quarterly and highlights performance trends in legacy and new issue RMBS, house price conditions and mortgage market developments. Fitch's Loss Severity index measures the percentage of loans that are seriously delinquent among U.S. private label, securitized mortgage loans.  
Published
Apr 16, 2013
Homeward Lays Off 20% Of Staff

Alternative real estate financing company cut about 120 jobs.

Industry News
Aug 12, 2022
Lone Peak Lending Joins Panorama Mortgage Group

Names Donovan Stamps as president.

Industry News
Aug 11, 2022
Fairway Independent Mortgage Hires Former PrimeLending President

Firm says Scott Bristol is part of aggressive originator expansion.

Career
Aug 11, 2022
Mortgage Rates Jump Back Above 5%

Freddie Mac says rates recent volatility continues.

Industry News
Aug 11, 2022
Redfin: Share Of Relocating Buyers At All-Time High In July

People are looking for less expensive and better lifestyles.

Industry News
Aug 11, 2022
Redfin Expands iBuying Business To Florida

RedfinNow, which makes cash offers for homes, now operates in 34 markets in 16 states and the District of Columbia.

Tech
Aug 11, 2022