If a homeowner is struggling financially or feels desperate because their mortgage balance exceeds current market value, abandoning their home is actually the last thing they should do. Contrary to popular belief, lenders do not want to foreclose on their property. I know of homeowners who haven't made a mortgage payment in over a year who are still in their homes.
Many people believe that if they miss a mortgage payment the bank will foreclose and this means that they and their belongings will be thrown out into the street. This is just not true. Banks have procedures they must follow and this takes some time. Rather than moving out of their home while wading through the paperwork and procedures involved and taking on another housing expense in the form of rent and moving costs, financially distressed homeowners are far better to remain in their homes, even if they are unable to make their scheduled mortgage payments.
Additionally, the only way for the market to stabilize is to stop foreclosures and the further value declines they create in our neighborhoods. A very viable option available to quite a few people is a short sale. A short sale is when a bank has agreed to accept a loan payoff which is "short" of the full balance. Some lenders have actually taken a proactive approach to the challenging real estate market and have streamlined their short sale procedures to the point where approval can be obtained in as little as 10 days! More lenders are watching these pilot programs, with the goal of adopting similar procedures in the coming months.
There are many Realtors who have been extensively trained in dealing with banks and negotiating short sales. If you or someone you know is having difficulty making their payments or finds their loan balance is so much larger than their home's current market value find a knowledgeable Real Estate agent to work with. Interview Realtors to find someone who has been extensively trained in this specialty, doesn't charge a fee up front, and who has a track record of successfully closing short sales. Short sales have been called "the brain surgery of real estate" and while I would seek a family doctor for treatment of the flu, I would seek out a skilled brain surgeon with a successful track record if I needed that type of treatment.
For questions about short sales or the Omaha area real estate market in general please contact us at the Omaha Real Estate Group at 402.345.4134. We are the Experts!