Submitted by Lisa Bennett, REALTOR®, Atlanta Fine Homes Sotheby’s International Realty
The change would help financially strapped homeowners
December 02, 2009, The Associated Press
The Treasury Department unveiled sweeping rules this week to help financially troubled homeowners who need to sell but can’t get a price high enough to pay off their mortgages. Homeowners will even get $1,500 to help cover their moving costs.
The plan is designed to help homeowners who don’t have the income or debt levels to qualify for a loan modification under the Obama administration’s $75 billion Making Home Affordable program. The plan establishes timelines, a standard process and documents, and cash incentives for participation.
“There’s always efficiency with uniformity,” said Vicki Vidal, associate vice president of government affairs at the Mortgage Bankers Association.
Short sales, as these deals are known, reduce the damage to the borrowers’ credit record and save the lenders the cost of foreclosure. Short sales also help neighboring property values because the sales price is usually higher than what the house would fetch in a foreclosure auction.
About one in 10 home sales this year was a short sale, or an estimated 500,000 sales, according to the National Association of Realtors.
To qualify under the new guidelines:
- The property must be the homeowner’s principal residence.
- The homeowner is delinquent on the mortgage or default looks likely.
- The loan was made before Jan. 1 this year and is less than $729,750
- The borrowers’ total monthly mortgage payment exceeds 31 percent of their before-tax income.
For more information on this topic, or for the entire article, please contact Lisa Bennett at 678.531.2996 or lisabennett@atlantafinehomes.com.