‘Short sales’ help Hawaii homeowners get rid of their houses to avoid bankruptcy
When Aloha Airlines shut down a year ago, Ron Verderame knew he had to escape the weight of a hefty year-old mortgage. The pilot faced a slumping real estate market and bleak job prospects, but finally, after trying for seven months to sell his Kane’ohe house, he obtained relief through a short sale.
Such sales — where a home is sold for less than a seller’s mortgage and the deficiency is forgiven — are helping dramatically higher numbers of financially struggling homeowners avoid credit-wrecking foreclosure.
The transactions are also providing good deals for buyers, are helping lenders minimize loan losses and are reducing the number of vacant foreclosed homes that can negatively affect neighborhoods.
A short while ago, these deals alternatively known as preforeclosure sales were virtually unheard of in Hawai’i’s moderately stable housing market. But not now.