Top Ten Short Sale Questions Frequently Asked By Houston & Spring TX Homeowners
Question # 1: What is a short sale?
Short Sales Can Be A Complex Experience for Houston and Spring TX Homeowners
Conducting a short sale on a home with a distressed mortgage can be a complex experience for any homeowner. Knowing one's options in a short sale and understanding the process can make the experience more successful and much less stressful. To assist homeowners in understanding the process, we have prepared a series of 10 blogs. Each blog answers one of the top ten short sale questions frenquently asked by Houston and Spring TX homeowners.
What is a Short Sale?
A short sale can be an excellent solution for homeowners who need to sell, and who owe more on their homes than they are worth, in other words the home has negative equity or is "upside down". In the past, it was rare for a bank or lender to accept a short sale. Today, however, due to overwhelming market changes, banks and lenders have become much more negotiable when it comes to these transactions.
A homeowner is 'short' when the amount owed on his/her property is higher than current market value. A short sale occurs when a negotiation is entered into with the homeowner's mortgage company (or companies) to accept less than the full balance of the loan at closing. A buyer closes on the property, and the property is then 'sold short' of the total value of the mortgage.
For homeowners to qualify for a short sale, they must fall into any or all of the following circumstances:
- Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
- Monthly Income Shortfall – In other words: "You have more month than money." A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
- Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.
HAFA Short Sale
Recent changes in lending institutions and the government have also improved the chances of getting a short sale approved. The bank doesn’t want to foreclose on your home, and short sales are more common than ever before.For example, while many families have received help through the Home Affordable Modification Program (HAMP), far too many won’t be able to keep their home even with a loan modification. For these families, the Treasury Department has established a new short sales program called the Home Affordable Foreclosure Alternatives Program or HAFA (Click here for more information).
A HAFA short sale is designed to streamline short sales by providing a uniform process and standard forms, as well as incentives for families and their mortgage servicers to complete the process. It offers homeowners who sell their homes under a HAFA short sale $3,000 to help cover their moving costs. HAFA may be able to help you through the difficult process of selling your home and moving to another home.
If you are struggling with your home payments, you’re not alone. An estimated one fourth of all U.S. homeowners are upside down on their mortgage—meaning they owe more on their home than it is worth – and millions are behind on their payments.
Often the best solution for homeowners in this situation is a short sale. The situation is complicated and the stakes are high. Never has it been more important to have a local market advocate on your side. Contact me today and let’s get started!
WHAT DO You DO NOW?
As a Certified Distressed Property Expert (CDPE), I make it my business to know all of the ins-and-outs of the options that are available for people who are in danger of losing their homes. Even if you are not specifically eligible for a short sale, it is important to remember one thing:
THERE ARE OPTIONS! Contact me today and schedule your free, confidential consultation.