Recent information from the Treasury Department has shown that GMAC Mortgage saw improvements in the number of short sales and deed in lieu of foreclosure programs that were offered to homeowners who were unable to qualify for a permanent mortgage modification plan from the federal HAMP initiative, which has been helpful in some cases to homeowners who may have been in a position where they could not sell their home in a traditional manner due to negative equity and may have potentially found themselves in a situation where certain foreclosure prevention programs were simply unavailable. Homeowners who have been successful at acquiring a short sale are usually those who have faced some form of financial distress, but each servicer has had a different amount of results in terms of homeowners who have qualified for these plans and how they have benefited.
Yet, for GMAC Mortgage, reports that were released this month showed that between June and July short sales and deed in lieu of foreclosure plans increased from 7,534 to 7,863 for homeowners who were not accepted for a trial modification. Also, homeowners who had their trial modification canceled saw an increase in these programs from 962 to 1,003, which again can be seen in a positive light by homeowners with this particular servicer who may feel that this type of foreclosure alternative assistance will be beneficial for their situation.
Again though, there have been some mixed opinions surrounding short sales and deed in lieu of foreclosure plans in general as homeowners have seen their credit score decrease as a result of using this particular type of alternative option to foreclosure, but homeowners who have successfully seen benefits arise after going through one of these plans often point out that they are being viewed in a more positive light, in some instances, by servicers or future lenders. Yet, homeowners do need to understand the difference between how they will be viewed as a result of using either a short sale or deed in lieu of foreclosure plan, as other factors may come into play as well.
As an example, GMAC Mortgage homeowners who are struggling, failed to find foreclosure prevention assistance, and successfully complete a short sale program may be in a position where they are indeed seen in a more positive frame by future mortgage lenders or lenders in general, but if homeowners have to use one of these foreclosure alternatives as a result of financial setbacks in their lives, this could also be an indication that other areas of the homeowners personal finances may have seen setbacks as well. While short sales or deed in lieu of foreclosure plans may lead to lower credit ratings for some, but the opportunity to possibly be viewed in a more favorable light than those who succumb to foreclosure or bankruptcy, homeowners do need to remember that if missed payments and other areas like personal loans or credit cards do arise this will impact their credit score negatively as well and, may simply be not be grouped in with any benefits seen by homeowners who simply sell their home at a loss in one of these programs.