By Joe Quirk
The mortgage debacle has brought many homeowners to their knees. What was once an easy solution to reaching their home goals has now become a living nightmare. Sub-prime loans allowed many buyers to purchase a home with little or no money down. Those who received an adjustable rate mortgage enjoyed paying low monthly payments on their new homes. Now their rates are due to increase considerably and many are finding that they are no longer able to make their mortgage payment.
Many financed 100% of their homes and, now because of reasons such as relocation or divorce, are finding that the current housing market has brought the value of their home down and has eroded away all their equity. Making it impossible to sell their home.
There is hope for home owners wanting to get themselves out from under possible foreclosure. President Bush recently urged lenders to work with home owners (see Bank Lenders Asked To Work With Borrowers) who have been in good standing up until the mortgage crisis.
Lenders are ready to work with borrowers to find the best possible solution for all parties involved and increasingly Realtors are assisting home owners sell their homes by negotiating a Short Sale with the lender.
A short sale is an agreement between the home owner and their mortgage lender that allows the owner to sell his property at a lower price than what is owed on the mortgage. “That is too good to be true,” you say. Well, it is not a simple task that can be handled with just a phone call. There is an application and approval process that takes place with the lender. It does take time and work. However, lenders are approving more short sales since they prove to be the better alternative to foreclosures.
Realtors usually are not aware of the need for a short sale until the home owner sees the market value of their home and realizes that it is not enough to pay off the mortgage. Typically, home owners are not aware of all the possible solutions they have available to them. Your Realtor should be able to advise you of all of your options (other options can include repayment plan and loan modifications – please consult with your Realtor or mortgage lender for further details).
This is a trying and difficult time and some home owners find it almost impossible to work through a tough situation such as this. Your Realtor, with your permission, can always assist you in negotiating with your mortgage lender. Realize that there are options for you. Seek the advise of your Realtor as to whether a short sale is the right option for you.