| Short Sales May Stop Some Foreclosures According to St Louis Mortgage and Lending Experts |
| Articles - Mortgage |
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Our economy, particularly the housing industry, has been deeply badgered by large amounts of job losses, foreclosures and home values being decimated as if by overnight.
Our economy, particularly the housing industry, has been deeply badgered by large amounts of job losses, foreclosures and home values being decimated as if by overnight. The harsh reality of this appalling situation is a paltry 4 percent of total homeowners receiving long-term mortgage assistance who faced foreclosure this past year. This has created a whirlwind of lawmakers trying to explore financial alternatives within the Obama administration aimed at helping the remaining 96 percent who may still lose their homes. Reports show that currently there are 2 million housing entities in the United States in foreclosure or bank-owned with more surely to follow. The government's current solutions have been futile at saving homes from this foreclosure epidemic and that there is an anticipated 8 million foreclosures looming on the horizon as the economy falters according to Citigroup analysts. Could the answer lie in encouraging more short sales? Well, the National Association of Realtors reported that over 500,000 home sales in 2009 were actually short sales. This was almost 10 percent of total house sales for the year. What seems to have caught many by surprise is the about face attitude banks have adopted in that they are now readily accepting short sales in an increasing amount. Further data shows that short sales almost tripled to 40,000 in the first six months of 2009, compared to the same months in 2008 as reported by the St. Louis Refinancing Group and the local lending community. The Office of Thrift Supervision and the Office of the Comptroller of the Currency seems to feel that in reality there were 25 foreclosures started or completed for each short sale filed and completed. "It's really finally dawning on banks that they're better off with a short sale. I think banks were in denial," as Mr. Richard Green, the director of the Lusk Center for Real Estate at the University of Southern California in Los Angeles portrays. Let's also consider the unrealized benefits for homeowners doing a proper short sale. They actually retain control of the sale just like any other home sale not to mention relieving themselves of any social stigma associated with a foreclosure. But is it harder to buy your next home after a short sale? If your payments have never fallen behind 30 days late and the lender does not require that you pay back the loan, Fannie Mae guidelines may allow you to buy another home immediately. The wait for an FHA loan is 3 years. However, if your mortgage payments fell behind more than 30 days and a short sale was approved by the lender, you still may qualify to buy another home with Fannie Mae within 2 years. But what if you were a victim of foreclosure? Do not despair. Even with restrictions in place, you may qualify to by another home within 5 years and if there's no restrictions in place, within 7 years. And for investors who do not occupy the home as their primary residence would have to wait 7 years for a Fannie Mae insured loan. With political pressures escalating from demanding consumers in the mortgage arena, the Obama administration has had no choice but to champion the short sale as a feasible alternative to foreclosure. The Treasury Department has taken steps towards finalizing guidelines employing the use of short sales under the Making Homes Affordable program. The administration has also appealed to participating servicers under the new Home Affordable Foreclosure Alternative (HAFA) program to embrace the short sale as a substitute to foreclosure. This needed program has been implemented for homeowners who do not qualify for a loan modification under the Home Affordable Modification Program (HAMP). DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Want to find out more about a St Louis Home Mortgage, then visit Floyd J. Tapia's recommended site on how to choose the best St Louis Lending professional for your needs. |