Servicers that work on delinquent Federal Housing Administration (FHA)-backed mortgages are becoming more proficient at short sales, reducing the agency’s losses on insurance claims, according to a new government report.
FHA servicers completed 27,150 short sales during the first three quarters of fiscal year 2012 (ended June 30), a 65% jump in such transactions from the same period a year ago, according to the Federal Housing Administration.
The loss rate on short sales is 47% compared to losses of 71% on sales of foreclosed properties or REO, FHA said in its recently released third quarter report to Congress.
During the first three quarters of FY 2012, FHA completed 75,550 REO sales, up just 11% from a year ago.
“The actual year-to-date net loss rate on claims is about 63%, down about 1.5% from last quarter, as short sales increased as a share of all claims,” the mortgage insurance agency said.