Big US banks including Bank of America, Wells Fargo, JPMorgan Chase and Citigroup are moving to clear their books of troubled mortgages by embracing “short sales”, in which homeowners settle debts by selling their properties for less than the mortgage value.
Short sales are expected to climb sharply this year as home values continue to fall in some parts of the US, leaving many borrowers owing more on their mortgages than their homes are worth.
As moratoriums on mortgage payments and temporary loan modifications expire in coming months, the number of homes entering or in foreclosure is also expected to climb to a record 4.3m, from 3.4m in 2009.
