Short Sales are becoming the normal Real Estate transactions in 2010. The trauma of facing the loss of one’s home is a paralyzing feeling. A homeowner with a situation of job transfer, job loss, divorce or any number of reasons need to face reality for Reno NV Short Sale
Many government programs are just not working in favor of the homeowner. On Feb 18th the Obama Administration announced the Making Home Affordable (MHA) Program, a plan to stabilize the US housing market and offer assistance by reducing the mortgage payments to affordable levels and preventing foreclosure. This program did not help the masses the government thought it would. The qualifying factors reduced the number of homeowners that could enter the program.
What about Loan Modification? Get your paperwork ready. On June 1st the Treasury Departments new guidelines requires loan servicers to verify the homeowner’s income and financial hardship before placing them in the trial modification. Of the 1.2 million people who started the trial fewer than 300,000 have received permanent assistance.
Another 278,000 have washed out of the program because they failed on their payment plan or failed to send the proper paperwork. Paperwork has caused all sorts of problems for these rescue programs.
The HAFA Program takes effect on April 5, 2010 and sunsets on December 31, 2012.
This program will provide incentives along with a short sale or deed-in-lieu of foreclosure which is used to avoid foreclosure if the homeowner is eligible for modification under the HAMP program. This is a bail out for the homeowner as they would be clear of any judgments or future liability. This program also provides financial incentives for the borrower relocation assistance. A servicer may initiate foreclosure, but may not complete a foreclosure sale during the term of a fully executed Short Sale Agreement (while the borrower seeks to sell). Call a qualified Realtor to see if you meet the basic eligibility criteria for HAMP.
Now for the subject of investors buying short sales and flipping a Reno NV Short Sale. Is the Seller at Risk? There are two schools of thought for investors flipping properties. The first, most agencies and brokers will steer far from this transaction, due to the complexity and the bad press. There are some attorneys and title companies that do handle this type of transaction. There are many challenges and legal hurtles that comes with this type of transaction besides the complications of a spread with the lender due to appraisals. Many transactions will fall out; however, the beauty of using an investor is the investor initiates the short sale and stays in the transaction until lender cooperation until the very end. The investor will step out of the transaction and the closing will take place with another buyer if there is no profit. In all, it doesn’t hurt to do these transactions which can be helpful in some cases but do come with complications. Most brokers and agents should not try this type of transaction. Any short sale can be very complex and lengthy regardless if an investor is involved or not.
On the investor’s side, it is the investors who will stay in the transaction until the end. In most short sales, buyers cannot seem to stay in the transaction which puts the sellers at risk for foreclosure. The buyers do not understand the lengthy and time consuming process so they walk from the deal. Obviously with any HAFA program there would be minimal spread for the investor. All in all short sales do try all parties’ patience. That is why so many buyers walk from short sales.
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