Federal Short Sale Program To Start April 5th, 2010

Federal Short Sale Program To Start April 5th, 2010

For those of you that do not know, the Obama administration is trying to encourage home owners to take the short sale route to avoid foreclosure. That is the best thing you can do for yourself. I know it's difficult facing the fact that you are losing your home. Read on to see the difference between a short sale and a foreclosure.

In short, (no pun intended :)) a short sale is when you have to sell your home for less than what you owe on your mortgage. It's also better on your credit than a foreclosure. As of now, it will take 3 to 5 years before you can get a mortgage. With a foreclosure, you are looking at, at least 10 years or more before you can get another mortgage.

This new short sale program is also to curtail fraud among the mortgage banking system.

Beginning April 5th, lenders will have to consult with real estate practicioners to assess home values and a minimum acceptable offer. Then they must accept any offer that is equal to or higher than the assessed home value. Right now, banks will not divulge the minimum they will take until an offer on the home is presented. If the bank feels the offer is too low, then they will negotiate to try to get a higher price.

The program will also offer a cash payment to the home owner, as well as to the servicer and a second lien-holder, and will protect future lender lawsuits for the unpaid mortgage balance.

Over the next 6 months or so, we'll see how it goes. It's going to be interesting for sure since this is a non-mandated program. No one is forcing the banks to process short sales faster.

Jackie Connelly-Fornuff
Coldwell Banker ResidentialBabylon, NY 11702
Direct: (631) 274-1937
Cell: (631) 703-0201
Email: Jackie.Connelly-Fornuff@cbmoves.com
Website: www.longislandrealestatelady.com