St Louis Mortgage and Lending Experts Have Mixed Opinions On Short Sales Stopping Foreclosures
Our economy, particularly the housing industry, has been deeply badgered by large amounts of job losses, foreclosures and home values being decimated as if by overnight.
The reports coming out of Washington for the last 12 months attest to the brutal facts that an insignificant amount of homeowners facing foreclosure received mortgage assistance.
This has caused a scrambling of politicians within the Obama administration to search for viable alternatives for the other 96 percent already in foreclosure and the onslaught of future victims in 2010 and 2011.
Demographics are showing that approximately two million homes and other real estate elements are falling into foreclosure or are bank-owned with more losses coming.
Citigroup experts say the government’s current solutions have been ineffective at keeping people in their homes, and they anticipate lenders could foreclose on another 8 million loans as the economy worsens.
What does this have to do with short sales? Well, according to the National Association of Realtors, approximately 500,000 transactions in 2009 were short sales which represented almost 10 percent of all home sales.
What seems to have caught many by surprise is the about face attitude banks have adopted in that they are now readily accepting short sales in an increasing amount.
Comparative reports show that in the first 6 months of 2009, short sales tripled to 40,000 which were far lower in 2008 as previously discussed by the St. Louis Refinancing Group.
This is later contrasted by the Office of Thrift Supervision and the Office of the Comptroller of the Currency reporting 25 foreclosures started or completed for each filed short sale.
Mr. Richard Green, the director of the Lusk Center for Real Estate at the University of Southern California in Los Angeles writes: “It’s really finally dawning on banks that they’re better off with a short sale. I think banks were in denial.”
Let’s also consider the unrealized benefits for homeowners doing a proper short sale. They actually retain control of the sale just like any other home sale not to mention relieving themselves of any social stigma associated with a foreclosure.
But is it harder to buy your next home after a short sale? If your payments have never fallen behind 30 days late and the lender does not require that you pay back the loan, Fannie Mae guidelines may allow you to buy another home immediately. The wait for an FHA loan is 3 years.
However, if your mortgage payments fell behind more than 30 days and a short sale was approved by the lender, you still may qualify to buy another home with Fannie Mae within 2 years.
But if foreclosure was unavoidable, you may qualify to buy another home within five years if the home was your primary residence with included restrictions. And if there were no restrictions in place, the wait is seven years.
And for investors who do not occupy the home as their primary residence would have to wait 7 years for a Fannie Mae insured loan.
With political pressures escalating from demanding consumers in the mortgage arena, the Obama administration has had no choice but to champion the short sale as a feasible alternative to foreclosure.
In addition, the Treasury Department has recently laid out finalized guidelines for carrying out short sales under the Making Homes Affordable program.
Under the new Home Affordable Foreclosure Alternative (HAFA) program, the administration is urging participating servicers to follow through with short sales as an alternative to foreclosure.
The HAFA program was a vital implementation for current homeowners that did not qualify for loan modifications under the Home Affordable Modification Program also known as HAMP.
Looking to find the best deal on a St Louis Home Loan, then visit www.StLouisRefinancingGroup.com to find the best advice on a St Louis Refinance or Mortgage Loan for you.
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