Industry News

Short sales, REOs contribute wave of lawsuits

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An increase in short-sale attempts has resulted in an uptick in short-sale lawsuits, while the recent increase in loan-modification attempts could result in future litigation, according to a presentation at the San Diego Association of Realtors Expo earlier this month. Additionally, the wave of bank-owned (REO) real estate sales in California has contributed to a rising volume of disclosure-related lawsuits. For more than a year California has consistently ranked in the top four among states with the highest foreclosure rates. During this time, homeowners looking for a possible alternative to foreclosure have often turned to short sales and more recently loan modifications as a solution. Rise in short-sale lawsuits Shannon Jones, owner of Shannon Jones Law Group in Danville, Calif., a keynote speaker at the expo, said, "We're seeing an increase in short-sale (litigation) … this is probably the biggest area of the lawsuits I have (on my desk) right now." The ...