L high res 40percent

Rachel LaMar, J.D.
Broker, Attorney, Owner
LaMar Real Estate
Rachel@LaMarRealEstate.org
Cellular 760-310-9466
CA BRE# 01399682

blog-logo
rachel

News, Views and Opinions on Real Estate, Law and the North San Diego Community

blog-logo
rachel
L high res

Rachel LaMar, J.D.
Broker, Attorney, Owner
LaMar Real Estate
Rachel@LaMarRealEstate.org
Cellular 760-310-9466
CA BRE# 01399682

News, Views and Opinions on Real Estate, Law and the North San Diego Community

New Government Program May Aid Short Sales

There is a new program on the horizon that aims to help homeowners who have not qualified with loan modifications become more likely to obtain their lender’s permission for a short sale. This could be big news for many, possibly eliminating millions of foreclosures. The clincher: homeowners could receive a payment in exchange for leaving their homes. Sound too good to be true?

This new aggressive approach stems from a brutal fact: over five million homeowners owe more than their homes are worth and face the possibility of foreclosure. The government, who has formulated other plans to assist with loan modifications, is hoping that this new plan will prove more helpful than it’s predecessors.

Set to roll out April 5, the new program focuses on short sales and getting their approval. Here’s how it works: if a homeowner has tried unsuccessfully to obtain a loan modification from it’s lender the lender will now be compelled to accept a short sale. The lender will be given $1,000. If there is a second lien holder it will be given $1,000. And the cherry on the cake: the homeowner will be given $1500 as “relocation assistance.” In return the lender will agree not to come after the borrower for the difference between the sales price and what was owed on the balance (the capital gains).

Assuming this plan actually works, what are the benefits?

1. Less foreclosures. This is good for neighborhoods and homeowners and the housing market.

2. The homeowners’ credit will not be affected as negatively as if there had been a foreclosure.

3. Chances are that the homes will not be left in such a poor state, since the homeowners get a financial gain from the deal (the $1500).

4. Lenders will save money by not having so many foreclosures on their hands.

5. The housing market will likely benefit, as short sales will no longer take mysterious amounts of time, thus reducing inventory and getting more homes sold.

So, will this one be the one that works and benefits all those parties involved? There are naysayers out there but I sure hope so. It sounds interesting and going after the short sale is definitely better than letting millions of homes go into foreclosure. It is not the cure for the housing woes, but it’s a start. Let’s hope it works.

Share

3 Comments

  1. s. lamar st on April 5, 2010 at 4:13 am

    […] lamar st Rachel LaMar, J.D.3. Chances are that the homes will not be left in such a poor state, since the homeowners get a […]



  2. Rachel LaMar on March 8, 2010 at 11:45 pm

    Thank you, Julie. I agree with you that the process is frustrating. I sure hope this newest tactic works.



  3. Julie Ferenzi on March 8, 2010 at 11:36 pm

    Rachel, I clicked your link from Active Rain. I heard something about this the other day, but I had not done my research yet. I sure would like to have this process mainstreamed for everyone involved… especially the buyers. They are the ones biting at the chomp in these deals. Patience is a virtue when buying a short sale. As a short sale listing agent I know I’ll close the deal, but I usually go through 2 or 3 buyers before we close.

    Thanks for the info… I’ll share it with my buyers and sellers!



Leave a Comment