Short Sales and Negative Equities   Swimming in an Underwater Housing Market   Short Sales and Negative Equities are the result of the harsh effects of a housing marketing readjustment. Allowing these types of housing situations into a Relocation Program provokes some interesting questions. Will the company be at risk by allowing unusual sales into the program? Would this really be the best time to relocate a family who is in this scenario? If the company does decide to move someone in either a short sale or negative equity situation, will the company provide hardship assistance to shield the employee from loss?   From this month’s Paragon Pulse survey, the answers are clear.  The majority (85%) of respondents indicated that 2% or less of homes in their relocation program experience a short sale situation. This low percentage of homes in a short sale situation is a promising sign in times when short sales seem so prevalent. In addition, 54% of respondents indicated that if a home becomes part of a short sale, it would not remain eligible for 3rd party Homesale benefits. However, all respondents use of a Loss on Sale provision as part of their relocation program to help mitigate some of the hardships that a relocating family might be experiencing.   Short Sales and Negative Equities present difficulties for any relocating employees to be in when selling a home. While companies want to help shield transferring employees from the hardships related to relocation, it is also clear that companies do not want to take on the responsibilities and risks of an employee’s personal investments as in the case of real estate. If companies were to protect the transferring employee from all risks associated with homeownership, this would be in affect subsidizing personal investments of employees.  The intent of most US domestic relocation policies is to offset the financial burdens related to relocating, not keep employees “whole”. While short sale situations may be more difficult than typical relocations, many relocation management companies have made provisions to work with short sale situations as part of the relocation program.  With well defined roles and responsibilities to facilitate the process, some third party companies now allow for short sale situations negating the need to eliminate a transferee from the relocation program while minimizing the risk to the corporate client.	Survey Participation     May’s Pulse data represents results from 20 corporate relocation professionals from organizations of the following size:   1,000 to 10,000          19% 10,001 to 20,000          8% 20,001 to 50,000         23% 50,001—100,000          23% 100,001 +                   27%   Final survey results are included in this document.
		July 2009 Survey Results    Of the total employee population, how many assignees do you mobilize annually?   less than 20 16% 31 to 50 12% 51 to 100 8% 100 to 500 48% Over 501 16%         What percent of homes in your relocation program experience a short sale?   0%   27% 1%-2%   58% 3%-5%   12% 6%-10%   0% above 10%   4%         If a home is eligible for a third party homesale program and it becomes a part of a short-sale, do you allow the home to remain eligible for the third-party homesale process?   Yes 46% No 54%         What other forms of relocation assistance do you provide to help mitigate hardship situations for the relocating employee?   Negative Amended Value (sale within % of the guaranteed buyout)   35%   Loss on Sale   100%   Negative Equity Assistance on Primary Mortgage   13%   Negative Equity Assistance on Second Mortgage   13%   Prepayment Penalties   9%           If you provide hardship assistance with a negative equity, do you require the employee to use funds from other relocation benefits (such as a Relocation Allowance) to be applied towards loss situation?   Yes 22% No 78%
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