Explore Your Options Before Letting Your House Go..

Many homeowners find themselves caught between a rock and hard place when it comes to their mortgage and home value. A short sale should always be considered before a foreclosure (or strategic default). Before you decide to stop paying that mortgage, consult a Realtor and talk to the bank — the earlier you start the conversation the better off you will be on the other side. Every situation and lender has their own unique idiosyncrasies, whether you have a 2nd mortgage, mortgage insurance, etc. — you need to know the facts and where you stand. These decisions are often very emotional and difficult but with the correct advice you may find the process a lot less painful.

**Update: Check to see if you qualify for HAMP – Home Affordable Modification Program. If you qualify for HAMP, you may qualify for HAFA


Borrower eligibility is based on meeting specific criteria including:

1) borrower is delinquent on their mortgage or faces imminent risk of default
2) property is occupied as borrower’s primary residence
3) mortgage was originated on or before Jan. 1, 2009 and unpaid principal balance must be no greater than $729,750 for one-unit properties.


The Home Affordable Foreclosure Alternatives (HAFA) Program provides additional options to avoid costly foreclosures and offers incentives to borrowers, servicers and investors who utilize a short sale or deed-in-lieu (DIL) to avoid foreclosures. HAFA alternatives are available to all HAMP-eligible borrowers who: 1) do not qualify for a Trial Period Plan; 2) do not successfully complete a Trial Period Plan; 3) miss at least two consecutive payment during a HAMP modification; or, 4) request a short sale or DIL.

Short Sale

Try a Short Sale in Lieu of Foreclosure

Enhanced by Zemanta

Tax Forgiveness for Homeowners Going Through Foreclosure & Short Sale

New CA legislation would provide tax forgiveness for sellers who owe more than their house is worth. Under the new law the shortfall would be forgiven rather than treated like income as it has in the past.

The IRS adopted this forgiveness in 2007, and in certain cases the IRS form 982 can be used. We advise that you consult a tax professional for details.

Reblog this post [with Zemanta]

Rehab 203(k) Mortgage Insurance

If eligible, buyers can receive extra funds to repair/rehab a home they are interested in. Check out the hud website for more details.

“FHA’s Streamlined 203(k) program permits homebuyers to finance up to an additional $35,000 into their mortgage to improve or upgrade their home before move-in. With this new product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser.”


Sideline Buyers..

With how much information is available to buyers, it makes sense to be patient and wait for that perfect property. But what happens when you find that property? Whats the next step??

Many potential buyers are doing research on the internet, but aren’t sure what they can afford. If you are starting to get serious about making a move, it may be time to talk to a lender.  Get your pre-approval so that you can research with confidence.

..and if you’re looking to buy a foreclosed home, make sure you’re getting your financing from a direct lender.

Foreclosure Reality

I am constantly hearing from prospective buyers that they are interested in foreclosed properties because “they are cheaper than the other properties” or “they are a great deal”.. but its important for buyers to know the reality behind foreclosures.

When a Realtor takes a foreclosure listing or an REO, they are working directly with the bank. The bank might require a few comparative analyses in an attempt to get the precise market value of the home.

In many cases, the reason the foreclosed property appears to be ‘below market value’ is because the home is going to require a great deal of work in order to make the house attractive or even livable. Foreclosures are almost always an ‘as is’ sale, so it is of the upmost importance to take condition of the property into account.