Hear Ye! Hear Ye! More Possible Help for Military Home Owners who Need to Do a Short Sale!
Service Members who Need to PCS and Sell
I know I am on a roll of short sale posts, but this news couldn't wait. Many service members will be returning home from combat duty abroad and given the expected budget cuts and downsizing, there will be
many military home owners that will need to move and sell their current home.
According to an article by Karen Jowers in the Army Times, Big banks must offer relief to some military homeowners, a new program seems to be forthcoming to help those military home owners who have to move and sell because of military orders. With the housing economy today, military members are finding it difficult at best to sell their homes for the amount they bought them for and move on free and clear to their next duty station.
The HAP and VA Compromise Sale
Some service members have been able to turn to such programs as HAP (Home Owner's Assistance Program), which is a program ran by the Department of Defense to help ease the burden of the military member having to sell a home, but unable to because of the down turn of the economy. The HAP had specific timelines that needed to be adhered to to be eligible for the program and was paid for by the DOD. Because of the exact timelines, there were those that were not able to qualify for this program, however still needed to sell their home.
Some members with a VA Loan could try for a type of military short sale called the VA Compromise sale. However, not every military member bought a home with that type of loan and still face the possibility of a short sale because of a mandatory move. If you don't know what a short sale is, it is the seller trying to sell their home for less than what they owe the lending institution.
Justice Department and States Attorney General Come up with Agreement with Big Banks
Because of the Justice Department and the States Attorney General, service members may be able to get relief directly from their lending institutions, the loans have to be from Wells Fargo, Chase, Citigroup, Bank of America and Ally Financial.
Essentially, these banks must allow for a short sale of the home and they must issue a deficiency waiver which prevents the banks from coming back and demanding payment of the shortage. Additionally, these banks cannot report this short sale to the creditors as being delinquent if the service member was not in default before the short sale.
Although the guidelines for this new program haven't been outlined, according to a source for the Army Times the basic qualifications are these
- Troops must be on full time Active Duty
- The property must be the principal residence, or must have been purchased between July 1, 2006 and Dec 31st, 2008.
- PCS Orders must have been received on or after Oct 1st, 2010 and must require a relocation outside a 50 mile radius.
- The Short Sale must take place within 12 months of the relocation
How Do You Know if You Qualify
If you are a service member that is PCSing and you need to sell your home and you feel you may need a short sale, the first thing you should do is call your lender and see what assistance is available to you, (according to the Army Times, if your lender cannot help, call the Justice Department's Military Help Line at 800-896-7743). Calling a Realtor® that is familiar with working with military members and familiar with short sales is also going to be your best bet.
What you shouldn't do is give up and just leave as that could have further implications later. There are several programs that are available to assist you if you need to PCS and sell your home. Call your lender, and get with a local Realtor® who can help you determine whether you even need a short sale and if you do, guide you through the process.
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