Who qualifies for a Short Sale?

Generally a Short Sale is granted by the lender to homeowners who have experienced a financial hardship that prevents them from continuing to pay on the mortgage. Rather than foreclose on the home, which is a huge expense to the lender and very devastating to the homeowner’s credit, a Short Sale may be done instead of foreclosure. Some of the common hardships that lead to a Short Sale are: loss of a job; a serious illness; divorce; financial stresses from liens or delinquent taxes; or even the death of a spouse or loved one.

What is the HAFA program?

HAFA® provides homeowners the opportunity to exit their homes and be relieved of their remaining mortgage debt through a short sale or a deed-in-lieu of foreclosure (DIL). It also provides homeowners with $10,000 in relocation assistance.

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What is the HARP program?

The Home Affordable Refinance Program ®, also known as HARP ®, is a federal program of the United States, set up by the Federal Housing Finance Agency in March 2009 to help underwater and near-underwater homeowners refinance their mortgages. Join the 3.4 Million people who have benefited from the Home Affordable Refinance Program ®!

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Will I receive any money at the closing of my home?

Generally no, however a new program Home Affordable Foreclosure Alternatives Program (HAFA) may allow the homeowner to receive 3,000.00 to be used for relocation expenses. As of 2009, the Treasury Department introduced HAFA program to provide a viable option to homeowners who are unable to keep their homes through the existing Home Affordable Modification Program (HAMP).

Would it be easier to let my home foreclose?

On one hand, yes it is easier because the seller really doesn’t need to communicate as often with the lender. However, there are some potentially damaging consequences. In some states, a lender may seek a deficiency judgment following a foreclosure to try to get back the money you still owed on the home. The lender may then try to place liens on other properties, garnish your wages, or even repossess vehicles to recoup their losses. This is why a Short Sale may be a better option for a distressed homeowner in that a deficiency judgment and the negative consequences might be avoided. For more detailed information, seek advice from your CPA or legal counsel.

What is the seller’s advantage for doing a Short Sale?

Well, one of the best reasons to do a Short Sale is to try to avoid a lender from pursuing a deficiency judgment against the homeowner. The next reason is preserving the homeowner’s credit. Both a foreclosure and a short sale will negatively impact a homeowner’s credit, however, a foreclosure is much worse. Foreclosures will remain as a public record on a person’s credit history for 7 years or more. This will hurt the person’s ability to get a new home loan and will put him or her in a high risk category causing much higher interest rates. It could also impact career choices as many employers now check a person’s credit report as part of the hiring process. Also, homeowners who are police officers; security officers, military, and/or CIA could possibly be terminated from their position or lose their security clearance if they have a foreclosure on their credit score.

Will filing for Bankruptcy affect a short sale?

Yes, if you have put the home under bankruptcy protection then the home cannot be sold as a short sale until the home is released or discharged from the bankruptcy. Notify your real estate agent to discuss the options available to you.

Why do banks and lenders accept Short Sales?

At first it seems hard to believe that a bank would be willing to so deeply discount the sale of a home until you look at the situation from their perspective. If a bank forecloses on a home they must repossess it, make repairs, change the locks, and pay for a variety of legal fees. A short sale often costs less than what it cost to foreclose on the home, so the bank has actually saved money. Another reason is that in this distressed housing market with so many foreclosures, the bank doesn’t want too many foreclosures (or bad debts) on their books. This prevents them from borrowing more money from their resources, so they are unable to give out new loans to increase their revenue streams.

What’s the next step?

Contact Audrey today and let her discuss your needs to find out what your options are. You are NOT under any obligation to accept his real estate services by filling out the forms, contacting him, or receiving any information.

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