Saw this article in the Fredricksburg newspaper about lenders agreeing to short sales to avoid foreclosure.
This is only logical: it's a lose-lose situation for the bank to take posession of the home.
If a seller puts their home on the market, and doesn't get any offers that will cover their existing loan, the banks would be wise to write down the value of the loan, sell the home to the highest bidder, and be done with it.
While the seller isn't going to get any equity out of the deal, at least they are free and clear of the home, and their credit isn't ruined by a pointless foreclosure.
At the same time, owners who find themselves "upside down" on their loans, should talk to their lenders before they stop making payments and voluntarily go into foreclosure.
"Short sales are one of the tools to avoid foreclosure if all other workout options are exhausted," said Amy Bonitatibus, Fannie Mae spokeswoman. "It's always in the best interest of the home buyer, the community and the investor to avoid foreclosure."
Foreclosures drop in the D.C. area
Comments
Brett, aren't short sells the credit score equivalent to a foreclosure anyway? I was told this by a friend. If a homeowner is going to take a huge hit to his credit score either way, why would they bother to continue to pay the mortgage payments while they (hope) wait for the house to sell?
It is estimated that Obama's plan could benefit 8 to 9 million homeowners from the new modification procedures. So how do you know you qualify for the Mortgage Modification? Check the website www.obamamortgage2009.blogspot.com
to see if you qualify. I was also in trouble and I am glad I did check it before I talk to my mortgage company and it helped - John Mayer, California
How Badly Does a Short Sale Hurt Your Credit?
While every homeowner's credit standing is different, I've spent over 25 years working with and observing credit scoring and I CAN promise you that a short sale and a deed in lieu or a foreclosure do not compare to each other.
FNMA guidelines, at this writing, now state that you must have 24 months of good credit after your short sale before you can qualify for a mortgage to buy another home. If you were to have a Deed in Lieu, you would be required to have 48 months of good credit after handing over the keys.
gurublog.sdshortsaleguru.com/credit_issues/
Hope that helps.
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