Many believe that the short sale is no longer needed as the market is "recovering". Although nationally that is the case we still have many markets that have barely started to see price appreciation. Even without the extension of the Mortgage Foregiveness Act by Congress, for many this is still the strongest option depending on their personal financial situation and tax situation.
In fact, when we started 2014 according to industry expert, CoreLogic, approximately 6.3 million homes or 12.7% of all residential properties are still underwater—meaning borrowers owe more on their mortgages than their homes are worth. A year ago, the negative equity share was 20.2% representing 9.8 million households.
If you live in the Oswego, IL and surrounding communities you may be part of the 12.7%. Public records indicate that there are over 60 homes in the last quarter of 2014 that had a lis pendens filed at the Kendall county. Usually this is filed after a homeowner has missed at least 3 months of mortgage payments.
There are currently 8 active short sales in Oswego, IL on the local MLS. In 2014 so far we have had 24 successful short sales close. There are 15 homes under contract waiting to close - with 2 of those in the pending status - closing within the month.
If you have missed your mortgage payment due to loss of job, medical reasons, increased debt and find yourself pondering what your options are allow me to give you some of those options.
Loan Modifications - By contacting your mortgage servicer and providing the requested paperwork the servicer depending on the investor (i.e. actual owner of the mortgage) may be able to lower your monthly payment - either permanently or for a fixed number of years to allow you to continue living in your open. Either hire an attorney who is an expert in this or do it yourself. This process is time consuming, frustrating, and you still may not obtain a payment that will allow you to continue your payments within your current financial situation.
Refinance using HARP - Home Affordable Refinance Program - Perhaps you have a higher than market interest rate on your mortgage and have not taken advantage of this government program. If your mortgage qualifies and if you meet the program requirements this may be a strong possibility. Contact an experienced HARP mortgage company.
Deed In Lieu of Foreclosure - Contact your servicer and see if you qualify to hand over your keys in exchange for walking away from your home. You will still have consequences on your credit score. Make sure you have an expert attorney guiding you through this process - you may have tax consequences so check with a CPA or tax accountant. You won't have a foreclosure on your credit report but you will have the DILF and depending on type of credit score company being used the points taken away may vary widely. Still paperwork, still should be done with the assistance of a trained attorney.
Short Sale - Sale of your home with permission from your servicer/investor to sell home for less than the current mortgage balance. Depending on your financial situation this may provide you the best option to leave your home on your terms, sometimes with some relocation assistance from your servicer/investor and have the deficiency waived. The hit to your credit score may be less than any of the other options (depending on your specific financial situation) and future mortgages may be easier to obtained in less years than a foreclosure, deed in lieu of and/or with a combination of a Bankrupty on your record.
Banks and the actual owner of the mortgage have realized that they are able to get more money for their asset (your home), usually in better condition (i.e. your still living there, paying utility, HOA, doing maintenance), than if they go the full foreclosure route. If you have ever viewed foreclosure homes you know that many are not exactly in "move in" condition. If you add the holding costs after the bank/servicer receives the property back you can add thousands in property preservation costs and legal fees for the actual foreclosure attorneys.
As a successful short sale processor since 2006, allow me to discuss your options with you. Along with other professionals (attorney, CPA, accountants) a knowledgeable real estate professional is someone that you should discuss your options with. I personally process my short sales believing that a 3rd party negotiator nor an attorney's legal staff (paralegal, office personnel) don't have the necessary"skin" in the game to be as strong of an advocate as I am.
I have the happy short sale sellers to prove it! Give me a call and let me make 2015 an easier year!
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