Good news comes from rapidly rising home prices in the greater Sacramento area. Everyday, more and more homeowners in Roseville, Rocklin, Loomis, Citrus Heights, Lincoln, Folsom Carmichael, etc., are no longer under water on their mortgage. Equity sales are becoming more the norm than at anytime in the last five years.
However, if you do still owe more on your home that its current value will support, here is an article with timely advice. DSNews’ Esther Cho wrote; Starting November 1, 2012, Fannie Mae and Freddie Mac will implement new short sale guidelines to make the approval process easier for eligible borrowers.
The changes are part of the FHFA’s Servicing Alignment Initiative. For example, borrowers who are 90 days or more delinquent and have a credit score lower than 620 will no longer be required to provide documentation for their hardship.
The GSEs will also waive their right to pursue deficiency judgments. Borrowers with sufficient income or assets can make cash contributions or sign promissory notes instead.
One major barrier that is also being addressed is the issue with second lien holders. To prevent second lien holders from stalling the short sale process, the GSEs will offer up to $6,000.
The new guidelines will also enable servicers to approve a short sale for borrowers who are not in default but face certain hardships including the death of a borrower or co-borrower, divorce or legal separation, illness or disability or a distant employment transfer.
Provisions were also created for military personnel with Permanent Change of Station (PCS) orders. Service members who are required to relocate will automatically be eligible for short sales even if they are current. They also won’t be obligated to contribute funds to pay for the remaining deficiency.
If you have questions about whether a short sale is right for you, or if I can assist you in buying or selling your house, please call Kelly Groth of Keller Williams Realty at 916-316-4000 or email Kelly@grothhomes.com.
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