Understanding Short Sales
Everywhere I go the word short sale just seems to come up in conversation. In fact, just recently I had an agent approach me trying to recruit me to join his team as he was receiving another 1000 leads of individuals possibly going into foreclosure that could become short sale clients, and that was just in San Antonio. I decided that the short sale deal just wasn’t for me, but there is definitely a market out there that agents are getting all over. For most of us, we know that short sale has something to do with Foreclosure, but what exactly is a short sale. If you are a home owner teetering on foreclosure, then a short sale definitely seems the better route to go.
So why all this talk about short sales
Due to our current economic state, the rise in unemployment, and drop in home prices the numbers of short sales we are seeing is growing by leaps and bounds daily. As a result of this hit to the market, the short sale has become the popular method for providing home owners an option of selling their home and avoid going into foreclosure.
On April 5th, the Fannie Mae program Home Affordable Foreclosure Alternatives (HAFA) will release a short sale program under the “Home Affordable Modification Program” that should help streamline the process, as well as provide lien holders incentives on short sales transactions.
Short Sale by definition
Short sale is essentially the alternative to Foreclosure and/or bankruptcy due to default on paying your house note. The short sale transaction is where the lender has agreed to accept a lower amount for the loan than what is owed by the current homeowner, potentially providing an opportunity for the home to be listed at a reduced price and hopefully sold quickly. Usually the home owner will make some arrangements with the lender to pay off the difference in the amount owed.
Should you find yourself in a situation where you could be facing short sale there have been some challenges with the process that hopefully will be overcome with the new guidelines being laid out by the HAFA.
Some of the biggest challenges are 1) agents unfamiliar with the process, 2) dealing with multiple lenders, and 3) no real system on how the process should be carried out.
To learn more about short sales, see all the programs being offered by the Home Affordable Modification Program, as well as find out if you qualify for the program, and/or a loan modification visit the website by clicking here: https://www.hmpadmin.com/portal/programs/index.html
