Short Sale Plans For JP Morgan Chase Homeowners Through HAMP–Are Homeowners Seeing More Foreclosure Alternatives?

Short sales and deed in lieu of foreclosure programs for J.P. Morgan Chase did see slight increases according to data that was released in the early parts of May, which provided information from HAMP reports through March 2011. Many homeowners feel that these foreclosure alternatives are, truly, the only way to save face when they have begun down a road which will inevitably lead to foreclosure, and this usually constitutes homeowners having explored options like home loan modifications but came up short. However, even though there were increases in the data that tracks servicer performance in these areas, questions over whether homeowners will benefit from a short sale or deed in lieu of foreclosure program, no matter their servicer, still remain in place.

Chase homeowners saw slight increases in these foreclosure alternatives for those who were in a position where their trial modification was canceled, but the latest HAMP report also indicated that over 14,000 homeowners who were not accepted for a trial modification with Chase had been or currently are in the process of a short sale or DIL plan. While these programs are not exclusive to Chase, there are differences in the success and availability that servicers have either seen or currently offer for homeowners who are in a position where foreclosure may be the only option they have left, but there have been reports that were released weeks ago that have many homeowners questioning whether these alternatives are even worth the trouble.

While it has been mentioned before, research has shown that many homeowners will see a decrease in their credit score when they participate in a short sale which is comparable to the decrease that their score would see if they went through an outright foreclosure. Yet, this has led to many wondering why they should even participate in one of the foreclosure alternative plans, particularly when short sales can be problematic and take quite a long time to accomplish.

Homeowners who are in a position where they feel participating in a short sale will be more advantageous down the road need to take care though as some homeowners may find themselves in a position where they are not completely off the hook after they have sold their home at a loss. Ideally, homeowners should be able to draw up an agreement for a short sale that will have their mortgage servicer say they will no longer be pursued for any amounts that were not paid, but this has been the case in certain states, so this particular aspect of the short sale needs to be addressed for homeowners choosing this route.

Discharging the difference between the mortgage value and what the home is sold for will be one of the main areas of attention that homeowners must look at when drawing up a short sale agreement, but homeowners will also want to make sure they prepare for decreases that may come about as result of these actions.  Because homeowners who may be attempting to sell their home for a loss could face problems when attempting to rent, as one example, some may want to take action before their score drops as this can lead to higher overall costs or down payments for some.