August 24th, 2012 8:28 AM by Christopher Terry
Underwater? Having or are you going to have trouble making your mortgage loan payments? In a news release dated August 21st from the Federal Housing Finance Agency (FHFA) provided new standard guidelines for FNMA and FHLMC short sales. There were several positives including one were homeowners could enter a short sale while current on their mortgage payments, but only with specific hardships:• Death• Divorce (legal separation may apply)• Disability• employment relocation of 50 miles or more.
All though this is a good start, we need to push to include all nine (9) hardships listed for a HAMP modification, and both FNMA and FHLMC acknowledge these hardships. They are:1. Unemployment2. Underemployment3. Income reduction4. Disaster (natural or man-made)5. Business failure
It has been our experience that the majority of underwater homeowners want to continue to make their payments through the short sale to keep their credit intact. Yet, in doing so, they are limiting hardship reasons to sell and these hardships are the tip of the iceberg. Underwater homeowners are often financially wiped out and are at the end of their rope already. For many of these homeowners it was easy, almost to easy to become a homeowner. The rules for getting them into a home were relaxed, very relaxed; but now that they find themselves in impossible situations we have rules that make it harder for them to exit their homes and get on with life.
FHFA…. we need an expansion of the hardship reasons for underwater homeowners to short sale their homes while staying current on mortgage payments. Open it up to the same hardships allowed for a HAMP modification.
Realtors, mortgage originators and homeowners…. please let us know your examples of why the 4 hardship reasons currently allowed by FHFA to short sale a home are not enough.
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Christopher Terry is a licensed real estate broker in Ma and RI, is a graduate of the Certified Distressed Property Institute, holds the prestigious CDPE designation and is the founder of EZ Home Search Real Estate Inc.