A new program that acknowledges that homeowners are unable to afford their homes is intended to speed up the short sale process. “The push right now is for servicers to avoid foreclosure and the push is coming not only from The Obama administration and the Treasury but also from the owners of the loans such as Fannie Mae and Freddie Mac. And the focus right now is on short sales. So, I think in 2010, you’re going to see a lot more short sales and hopefully reduced foreclosures,” says Travis Hamel Olsen, chief operating officer of Loan Resolution Corporation.
Guidelines issued earlier in the month for a $75 billion housing plan include the potential for banks to get government incentive payments in cases where borrowers are allowed to sell their home at a loss, bypassing the foreclosure process. Information available at MakingHomeAffordable.gov will help one see how much of a mortgage modification one might qualify for as well as answer some questions regarding loan modifications. If the borrower (homeowner) can complete the short sale, then the incentives go like this:
The homeowner can receive up to $1500 in relocation assistance and the servicers can get up to $1000 compensation.
“You have a primary lien holder and they’ll love this program because the servicers will get paid an additional $1000 for completing the short sales. On the other hand, you have all the subordinate lien holders in a short sale who also need to give their approval for the short sale in order for it to happen. The problem, though, is that the subordinate lien holders are the ones that are getting totally wiped out and under the program they would receive $3000 for their lien and in exchange they would have to write off the remaining balance of the loan and give up any rights that they would normally have to pursue the borrower thereafter for the remaining balance,” Olsen states.
This program will definitely help the homeowner, bank and speed up the short sale process at the same time; a win win situation for everyone. For more information on short selling your home please visit http://www.jonsutton.com/Short_Selling/page_2144870.html