Posts by Stephen Clinton
Stephen Clinton is senior vice president of Freddie Mac’s Conservatorship & Corporate Initiatives division. In this position, he is responsible for overseeing all significant conservatorship and corporate strategy initiatives. Stephen reports to Jerry Weiss, EVP and Chief Administrative Officer.
This is a time of substantial progress in the mortgage market – progress that's very real, even if it's not very glamorous. In the words of Freddie Mac CEO Don Layton, all of us in this industry are "present at the creation" of a better and more resilient system of mortgage finance. And it's one that can last for many years if we do it right.
With nearly 5 million borrowers at risk of foreclosure, short sales are playing a growing role in helping struggling homeowners avoid foreclosure. When all home retention options have been exhausted, a short sale is a good alternative that allows distressed homeowners to gracefully exit their home and transition into more affordable options. It’s also typically less damaging to a borrower’s credit report than foreclosure, and usually reduces the amount of time a borrower needs to wait to get a new mortgage in the future.
Homeowners are not the only ones who may benefit when foreclosure is avoided through a short sale. In fact, nearly every stakeholder benefits. Short sales reduce nonperforming loan servicing costs for servicers and potential loss and expense associated with REO and foreclosures for investors, and mortgage insurers can benefit from the possible reduction in claim losses and REO expenses. Furthermore, neighborhoods whose property values would ultimately suffer as a result of a foreclosure benefit from the higher sales prices that usually occur in a short sale. It’s also good news for local governments whose tax revenue has been impacted by the recession, as they will get their taxes paid quicker and in full.