Many homeowners in this country are experiencing the crunch of this economy. Whether through job loss, income reductions, or simply an interest rate adjustment on your home loan, any number of factors could have left you a victim of this housing crisis. As a result, homeowners have certain choices to face and none of them are very appealing.
First you would have to determine if your personal situation has left you having to leave your home. If so, here are some of the more common choices being considered.
a. Can you rent your property out and use the income to cover all or most of your overhead? Most of the time you can’t, plus the upkeep of rented property is very expensive (replacing HVAC, new flooring, etc).
b. Could you sell your home at current market value and still cover your debt? Depends on factors such as current market, current mortgage balance, condition of home, etc.
If a & b are not possible, the next few choices may be your only options.
c. Attempt to sell your home as a shortfall (when lender accepts less for the loan, to close the loan, than what is actually owed)
d. Let the lender foreclose on your home (worst option due to damage to borrower’s credit for many years to come)
The latter part of these options is not what any homeowner wants to hear, but the reality is that they are common options for thousands of families in this situation. As I have mentioned in previous entries, when requesting a short sale, it is always wise to have an experienced Realtor to assist you. There's no reason not to, at this point, it's not going to cost you a dime. Here are some important things to keep in mind when pursuing a short sale.
Communication with the lender is key, and although the homeowner would be the first to contact the lender with this request, it is often the Realtor who handles things from this point. The lender will commonly tell the homeowner to list their home with an agent, price it properly and wait for an offer.
The home owner needs to listen carefully to their Realtor and simply follow their instructions, because the next course of events are intended to help the homeowner avoid foreclosure and with any luck, eliminate a possible deficiency judgment.
Once offers start to be submitted, the agent will present them to the lender for "third party approval". Once in the hands of the lender's negotiator, it is only a matter of time before an offer is accepted and the homeowner can begin to repair his credit and look to the future in hopefully purchasing a new home, one that could be easier to afford. Of course the possibility of foreclosure has not been eliminated, but greatly reduced.
I notice that many homeowners don't even realize that this is a viable option for them. As agents, we conceder ourselves educators. The more we can educate homeowners to understand how this works, the more homeowners will be helped. Obviously this option is not for everyone, but in a distressed situation, this could be one consideration.
If you, or someone you know, are having problems handling the monthly mortgage payment, please let me know. We can sit down to determine a solution for your family. Don’t just accept that a foreclosure is your only option. It isn’t!
Published on Thursday, December 30, 2010, 10:52 AM Last Update: 2 day(s) ago by Nicholas Carioti, Jr. with additions from Scott Deaton www.scottdeaton.posterous.com
No comments:
Post a Comment