Selling your home with No Equity

News about short sales

Government Announces Short Sales Guidelines
The U.S. Treasury Department announced new guidelines this week designed to make short sales go more smoothly.

To qualify under these new guidelines:

• The property must be the home owner’s principal residence.
• The home owner must be delinquent on the mortgage or close to defaulting.
• The loan must have been made before Jan. 1, 2009, and be for less than $729,750.
• The borrowers’ total monthly mortgage payment must exceed 31 percent of their before-tax income.

Under the plan, borrowers will receive $1,500 from the government for selling homes for less than the amount of their mortgages. Mortgage-servicing companies will get $1,000 for each completed short sale. Second-mortgage holders can receive up to $3,000 of the sales proceeds in exchange for releasing their liens. Investors who hold the first mortgage can collect up to $1,000 from the government for allowing the payments.

Borrowers who complete a short sale under the program must be "fully released" from future liability for the debt, according to the guidelines.

Source: Associated Press, J.W. Elphinstone (11/01/2009) and The Wall Street Journal, Ruth Simon (11/01/2009)

Are you facing the unbelievable problem of many home owners.

Are you over your head in a home that you can't afford. Did your taxes go up higher then you thought? Did your mortgage rate change and you do not know what to do? Did you loose your job? Did you like many homeowners thought the bubble would not burst in the housing market.

The number one thing homeowners do is do nothing and just give up.  They feel that there is no way out. 

You do have an alternative to foreclosure.

Depending on your own situation every situation is different but some of the possibilities you can explore is:

Pay off by Refinancing your home. Completely paying off the entire loan amount plus any default amount and fees. Fees would be for obtaining a new loan. Possible your rate would be higher because of your situation.

Reinstatement  Paying the entire default amount plus interest, attorney fees, late fees, taxes and missing payments. For most people this is a hard choice.

Loan Modification This would be used by working with your exciting lender. They would come up with a program that you can refinance your loan. This would be communicating with them to work out a plan.

ForbearanceLender may be able to arrange a repayment plan based on the homeowners financial situation. The lender may be able to provide you a reduced payment amount or suspend payments. You would have to prove to the lender that this is a temporary setback and would be able to meet the new payment arrangement.

Partial Claim A loan from a lender that would be an additional mortgage on your home. A second mortgage. This loan would cover your back payments and any fees that you have accumulated from the first loan.

Deed in Lieu of Foreclosure This is when you give the lender back your property instead of them foreclosing on the property. However mortgage must be current and property taxes must be paid to date. However when you look to purchase a new home