The Department of Housing and Urban Development recently released it’s new preforeclosure sales program. Many people don’t realize that nearly 2 in 10 homeowners are behind on their mortgage. A preforeclosure, or short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property’s loan. It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the borrower. Both parties consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers. Fannie Mae and Freddie Mac are expected to release their program guidelines shortly.
In an effort to relieve lenders and real estate markets of record foreclosures, the government is offering incentives to both the home owners and lenders if they can work together to sell the home prior to foreclosure. In addition to avoiding foreclosure and salvaging their credit, HUD will pay the homeowners $1,000 for moving expenses if the home is sold within 3 months of the Preforeclosure Application.
For more information: http://www.hud.gov/offices/hsg/sfh/nsc/rep/pfsfact.pdf
Preforeclosures are tedious and require a motivated seller. But the benefits to a homeowners credit, security clearances, etc are well worth the hard work. To make the transaction less stressful, it is important that homeowners work with an agent that specializes in short sales! I am a Certified Distressed Property Expert and specialize in short sales. If you or someone you know is behind on your mortgage, please don’t hesitate to call me. The sooner we get started, the better the odds of a win-win transaction for both you and the lender!
