In a recent conversation I was asked, "How does a short sale really help the homeowner?"  This was not the first time I had been asked this question, but considering the source was a prominent individual with 20 years in mortgage lending, it was the first time I realized such uncertainty in the industry.   Keeping families in their home and choosing the right loan modification or refinance program is most important and must be the priority.  However, when this is not possible, paving the way to enable families to become homeowners again as soon as possible is the next best thing. 

Many benefits of the short sale are outlined in the Mortgage Forgiveness Debt Relief Act of 2007 - H.R. 3468, but perhaps equally important, are the new underwriting guidelines issued by Fannie Mae this past June.  https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2008/0816.pdf  With a foreclosure on their record, a homeowner must wait five years to be considered for new funding.  This time requisite has been increased from the previous 4-year standard.  Additionally, conditions such as a minimum credit score of 680 and a 10% down payment now apply before underwriting will be considered.  Deed-in-lieu-of- foreclosure remains a 4-year wait from the date the deed-in-lieu was executed.    

Here is the benefit to a short sale.  With this transaction on their record, these cooperative homeowners are only required to wait two years from the date the short sale is completed to be considered for a new mortgage.   It is not a matter of "if it's true," because it is.   It is startling that few real estate professionals understand the advantage this brings to their customer and how this benefits them professionally.      

As a Realtor, it makes perfect sense to build relationships with homeowners that are looking for an alternative to foreclosure.  You have a unique opportunity to build a trusting relationship and help a family in crisis.  Is there a better way to establish a client for life?  You earn a commission on the short sale, will earn a commission when your client seeks home ownership in two years, and will receive quality referrals to others seeking a Realtor they can trust.  In today's market, a short sale today truly means a homebuyer tomorrow.

For more information concerning the Mortgage Forgiveness Debt Relief Act of 2007 - H.R. 3648, please visit www.program3648.org.