Short Sales Triple to 400,000 Nationally Since 2008

According to a study released yesterday by CoreLogic, the number of annual short sales nationally has tripled in two years to about 400,000, and the estimated industry impact of fraud from the transactions is $310 million.

The study also found that risk of “unnecessary losses” to lenders happens in one in every 53 short sales. The average amount of unnecessary loss is $41,000 per transaction. CoreLogic says the definition of fraud continues to evolve but indicated “an egregious flip” is part of many short sales.

Tim Grace, a CoreLogic executive, concludes: “By definition, short sales constitute a financial loss to lenders but will continue to be a necessary part of the mortgage industry as it seeks stabilization. The primary objective for lenders is to eliminate unnecessary loss. The best way to mitigate fraud risk and unnecessary loss is through a collaborative effort where lenders collectively share pre-closing and post-closing information.”