Short sales are increasing

From The Washington Post:

The number of short sales completed jumped 208 percent during the first quarter of this year compared with the same period in 2008, according to a report issued last month by the Office of Thrift Supervision and the Office of the Comptroller of the Currency, which regulate banks.

Short sales could increase further as home prices continue to fall, leaving a growing number of borrowers owing more than their home is worth. Also, the Obama administration is implementing a program to pay lenders to accept less than the balance owed by the borrower in such deals. ...

Last year, about 5 percent of home sales in Loudoun County, one of the hardest-hit parts of the region, were short sales. Now they account for about 23 percent of the market, said Tony Arko, an agent for Market Advantage Real Estate.