Late last night, Congress reached a settlement in the “fiscal cliff” negotiations. As a result, the Mortgage Forgiveness Debt Relief Act has been extended for another year. The measure will continue to exempt from taxation mortgage debt that is forgiven when homeowners and their mortgage lenders negotiate a short sale, loan modification (including any principal reduction) or foreclosure. REALTORS® should tell their clients to keep their short sales on the market and encourage them to consult with their own tax advisers about their tax situation.
For some Homeowners in Danger of losing their home to Foreclosure, there has been a lot of Incomplete Information out there….
For example, many believe that a loan modification is a “cure-all” for distressed homeowners. While it is true that it can be a good option for some people, it isn’t always the best solution.
There are many more options available to homeowners. As a real estate professional with the Certified Distressed Property Expert (CDPE) designation, I have put together a list of 5 questions that anyone who is in danger of losing a home should ask before they make a decision.
HARP is designed specifically to help borrowers who may be ineligible for traditional refinancing due to loss of home value or because they have little (or no) equity. Like other refinancing options, with HARP you receive a completely new mortgage with new terms, interest rates and monthly payments. The new loan completely replaces your current mortgage and may lower your payment, which could help improve your monthly financial situation.
HARP may be an option if:
You are current on your mortgage payments (and haven’t been late in the last 6 months)
Your home value has decreased
Your first mortgage exceeds the current market value of the home
Your loan is owned by Fannie Mae or Freddie Mac
Qualifying for a Short Sale consists of having a “Valid Hardship” and the documentation to back it up.
Some typical Examples of that are an acceptable Hardships may be:
Loss of Employment
Death or illness of a family member
Relocation or Job Transfer
Divorce or Separation
Unexpected home repairs you cannot afford
These are only a few ideas of what may be accepted, it is always wise to seek out an experienced Short Sale Specialist Realtor to better assist you in getting started in your short sale.
Short Sales have been taking so long & many homeowners worried about how their credit would be affected. They have been on the fence. What is the right thing to do…Miss payments or Stay Current?
The federal Treasury Department’s short sale program, HAFA, has been updated again and these new changes mean more homeowners will be eligible for help. Part of Making Home Affordable, the federal short sale program offers many benefits for borrowers who can no longer afford to keep their home. The government is determined to help lenders, servicers and borrowers move through this process more quickly and clear out the delinquent loans asap.