Thursday, December 1, 2011

Foreclosure Alternatives

Fred Strickroot of HomeNet and the HomeNet "YOU" Team is a certified Home Affordable Foreclosure Alternative (HAFA) and short sale specialist serving the Tampa Bay, Florida areas of Hernando, Hillsborough, Pasco, and Pinellas counties. In this forum, Fred Strickroot will provide information and respond to questions that the community has regarding foreclosure alternatives. If you are behind on your mortgage payment, and experienced some form of hardship making it difficult to pay your current mortgage, you may qualify for foreclosure alternatives including home loan modification, short sale, or deed in lieu of foreclosure. Fred will answer questions and continue to post topics based on his knowledge of the most common concerns home sellers have regarding foreclosure alternatives.


QUESTION 1: A common question that I get from customers is how long does it take to close a short sale?

ANSWER: There is no set period of time, although the process is becoming more streamlined. Many of the lenders are becoming more "short sale" friendly, and are improving their systems to accommodate the processing of short sales. As a guideline, I always tell my customer that it will be a minimum of 45 days. The circumstances surrounding the short sale such as junior liens will lead to delays since junior lien holders will usually have to agree to accept a lower amount because there is no equity in the home to pay out.

IMPORTANT: Junior lien holders do NOT have to agree to take less then they are owed, however, it might be to their advantage to accept what they can get in a short sale transaction since foreclosure may leave them zero return.

QUESTION 2: There is a lot of negative publicity about home loan modification programs. Do the home loan modification programs work?

ANSWER: No doubt there is a lot of confusion out there related to the home loan modifications, but it is a first step for homeowners who want to stay in their homes. My experience has been that the homeowner wants to find a way to RETAIN their home first, but there is an abundance of real estate agents who are only interested in listing the short sale instead of helping the homeowner stay in the home, and the homeowners are being bombarded with confusing solicitations at a time when they need absolute clarity.

In my opinion, the first step should always be to help the homeowner stay in the home, and the home loan modification process is the first step. The majority of the negative publicity about these programs is that the lender/servicers are slow to respond, but I think we are going to be see some improvements in this area as the banks are starting to see the light. Not all homeowners will qualify, and some homeowners are not able to successfully stay in the program. All homeowners who want to be accepted into a home loan modification program must be able to demonstrate a financial hardship. Homeowners who are having financial difficulty, and believe that they are going to get behind on their mortgage payments should contact their lender/servicer (contact information for Home Affordable Mortgage Program approved lender/servicers), or a HUD approved housing counselor. These services from the HUD approved counselors are FREE, so if you are told there is a charge for the service it is a SCAM. Homeowners can also complete a home affordable modification application, as well as gather a wealth of information about the home loan modification process at Making Home Affordable.Gov.

While it is true that a small percentage of homeowners become eligible for a home loan modification program, and an even smaller number complete the trial period, the percentages are improving, and the process is becoming more streamlined and efficient.

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