In the following graph you will see an obvious downward trend in the number of foreclosure starts and Trustee Sales in the Bay Area county of Contra Costa. Earlier in the year we saw a downward trend during the first half of the year with a significant increase in the late summer months. However over the past several month we have seen the number of new foreclosure starts drop each month. What I expect to see if a downward decline over the next few months with an increase beginning in Q2 2012. A word of advice is that the Mortgage Dept Relief act is set to expire on December 31, 2012. This means that after this date you could have a significant tax burden do to capital gain. Also, many homeowners with distressed mortgages are just waiting until the last minute before attempting a short sale. I find this strategy dangerous in that I expect the banks to be flooded with short sale requests during the last half of the year. This will definitely have an affect on their ability to process the short sales and will extend the time to complete one. So, I expect many of the last minute short sales to be pushed into 2013 thus causing the homeowner to be subject to the tax burden.
Bottom line here is if you believe that you will be attempting a short sale in 2012, you should get started immediatly and not wait.
