Distress sales now define Orlando’s still-slumping home market: Two-thirds of all resale closings in the metro area’s core market these days are either bank-owned foreclosures or lender-approved short sales.
But the proportion of foreclosures to short sales varies drastically between affluent and low-income neighborhoods.
In desirable areas, such as Windermere and Baldwin Park, homeowners are much more likely to salvage their credit record by getting their bank to approve a short sale, which allows them to sell their house for less than they owe on the mortgage. In high-poverty areas that attract fewer buyers, most financially strapped owners have no such option, so when banks foreclose on them, their credit is damaged for years.
“When you fill out an application for credit, you have to answer if you have had a foreclosure in the last seven years,” said Orlando real-estate agent Shaina Markulin, who has completed more than 200 short sales. “There are no questions on the applications, at least at this time, about whether you have had a short sale. … A short sale is absolutely a better option than a foreclosure, 100 percent.”