Short Sale Alternatives
In order to try to avoid a short sale of your home you must:
- Clearly determine what hardship has caused this situation. Is it a rise in your monthly payment, job loss, divorce, illness or death in the family? In some instances, your lender may consider refinancing or modifying your loan. Unfortunately, a drop in the value of your home does not constitute hardship. Ultimately your options will be determined by the holder of your mortgage note.
- The servicer of your loan, the bank you send your check to, does not necessarily own your mortgage note. Identifying who holds the mortgage is critical to knowing how to proceed. If your mortgage is held by Fannie Mae, or Freddie Mac, the HARP (Home Affordable Refinance Program) may be of help. President Obama announced an improvement to HARP on October 24, 2011. This will not help everyone. Less than 50% of mortgages are held by Fannie Mae or Freddie Mac, the only mortgage loan holders participating in this program.
- There are free counseling services that can help you analyze the options available to you. If refinancing is not an option for you, then perhaps a loan modification might be. The basis the banks use in determining whose loan will be modified and whose won’t is really quite simple. They are not truly sympathetic to your needs, it is really all about THEM. Essentially you must convince them that the situation you are in is temporary or remediable. Their goal in modifying your loan is to keep you as a “performing asset”. The lenders are not required to modify loans and currently less than one-third of requested modifications are approved.If refinancing and loan modifications are off the table,
