Bank of America plans to dump 6,000 bank owned homes in Las Vegas in 2010, according to the Las Vegas Review Journal.
A BofA executive told the paper it expects to release about 500 repossessed properties per month this year in the hard-hit region as the foreclosure rate increases.
This is the so-called “shadow inventory,” previously foreclosed homes that were kept off the market in the hopes loan modifications or short sales could be negotiated.
But a large percentage of loan modifications have re-defaulted and short sales have been difficult to process, despite tons of interest from potential buyers.
Steve Hawks, the director of the National Association of Short Sale Professionals, told the paper it’s taking an average of four to six months to complete a short sale, though he sees it dropping to 90 days in 2010.
That’s good news for Bank of America, which is reportedly receiving 40,000 new offers a month on short sales.
Unfortunately, the bank is also expected to be repossess 11,000 – 14,000 homes a month in the early part of this year and 29,000 – 35,000 by November and December.
Hawks said 22 percent of mortgage defaults were strategic, tied to underwater mortgages, adding that banks need to eliminate the hardship letter required for short sales and consider all those who fall behind on payments.
Last spring, Bank of America eased its short sale rules, requiring less of the proceeds from a property’s selling price go towards paying off an associated home equity line of credit or second mortgage.
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