What is a Distressed Sale?
A Distressed Property situation is created when an owner is having difficulty making timely mortgage payments.
Distressed sellers often have plenty of equity in their homes but have cash-flow problems. This is usually due to a significant loss in income, divorce or change in mortgage interest rate. The homeowner could be a candidate for a loan modification through Making Home Affordable Plan (MHA). Or a Deed-In-Lieu Program to facilitate foreclosure alternatives.
What is a Short Sale?
A Short Sale is a transaction in which the lender(s) agree to accept less than the mortgage amount owed by the current homeowner. In some cases the difference may be forgiven by the lender but sometimes the homeowner must make arrangements with the lender to settle the remainder of the debt. This homeowner is a candidate for a short sale or a Deed-In-Lieu Program.
Work with a real estate attorney to protect your best interests and handle the negotiations with lender(s) towards achieving a loan modification. Real estate agents are not permitted to offer legal advice or help you modify the terms of your loan in a loan modification plan.
Work with a lender who is experienced in successfully negotiating loan modifications.
If you want to be represented by a real estate professional we can refer you to a SMH Agent who is experienced in working with short sales.
Why are the numbers of short sales rising so rapidly?
Due to the recent economic crisis, including rising unemployment and drops in home values in communities across the nation coupled with negative amortization loans and adjustable rate mortgages, the number of short sales continue to increase. Since a short sale generally costs the lender less than a foreclosure it can be a viable way for a lender to minimize their losses.
A short sale can also be the best option for homeowner who is “upside down” on their mortgage because a short sale may not hurt their credit history as much as a foreclosure. As a result some homeowners can qualify for a new mortgage sooner because they can more easily get back on their feet financially.
For More Information See:
Making Home Affordable Plan
U.S. Department of the Treasury and President Obama’s Administration announced on March 4, 2009, two new programs to help current homeowners in need. For complete details, visit: www.Realtor.org