Home loan short sales have been one alternative to foreclosure that homeowners have been able to take advantage of when they are in a distressed financial position and can no longer make their monthly mortgage payment due to factors like unemployment and negative equity. Numerous homeowners have had problems when it comes to the housing market and their property value, and aspects of the job market, like unemployment, creating situations where homeowners are either unable to pay their mortgage or are in a great deal of financial trouble as overall home loan costs versus their income may have risen to a point where their current mortgage is simply unaffordable.
Yet, homeowners may find that short sales could become a more viable option over the coming months as there are officials who are attempting to prompt more financial institutions to begin working with homeowners to find a solution to their financial troubles and mortgage payment issues. Obviously, homeowners looking for assistance on their home loan are usually first considered for a modification before any short sale opportunity may be offered, but there are some concerns that homeowners who are solely responsible for finding a buyer and then contacting their financial institution in the hopes of being approved for a short sale have slowed the process of transition down and left many homes sitting on the market as a result of being denied this foreclosure alternative.
While there was a report on HousingWire.com that centered around the issue of short sales that may be completed in a 30 day timeframe, which would obviously lead to fewer homes sitting empty on the housing market, the article makes mention of the fact that short sales being completed in this time period are not impossible but in many cases they may not be practical or even achievable in some cases. Simply put, short sales are not always quick and easy for homeowners in a bad financial position.
However, as part of the Home Affordable Foreclosure Alternatives program and other state-specific foreclosure alternative initiatives, short sales can be beneficial in keeping a back log of empty homes off of the housing market, particularly if banks worked with homeowners to find new buyers for properties that may have seen a reduction in the value or whose homeowner is simply in a position of financial distress and cannot make the mortgage payment.
There have been some mixed reports on homeowners looking to buy new properties, despite the fact that interest rates may be on the rise as property values still remain low, some homeowners feel that new buyers stand to benefit from these short sales as they can, potentially, get a new home at a low cost and, in some cases, with an affordable mortgage as well. Yet, homeowners do have to meet certain requirements before they can participate in a short sale, like having lived in the home for the last 12 months, being able to document particular financial hardships that prevent homeowners from meeting payments on the property, and having obtained their home loan owner before January 1, 2009, just to name a few.
Yet, homeowners who are in a negative equity situation and have not had success in the modification program can and have benefitted from a short sell on their home, and may find that their bank could even work with them in this area, but these plans are not always a guarantee as there are some short sales that could take a lengthy amount of time. However, homeowners may be able to talk with Hope Now representatives and approved housing counselors or simply speak directly with their bank to inquire about how they may qualify for a short sale option for their particular mortgage situation after they have attempted foreclosure through a modification or HAMP extension plan.