Here is the number one question I'm asked by struggling homeowners facing foreclosure, "Is it better to do a short sale or go through foreclosure?"
Unfortunately most Realtors don't have the education or training to answer this question. But to sum it up quickly, You need a Realtor that can analyze your financial situation, show you solutions to minimize your financial loss and limit the damage to your credit history. This will shorten the time it will take to recover from the hardship and repair you credit history.
Today's Realtor needs to understands when to pursue a Loan Modification by utilizing the provisions in President Obama's Making Homes Affordable, "Streamline Modification Program." This program was enhanced by S. 896: Helping Families Save Their Homes Act of 2009. http://www.govtrack.us/congress/billtext.xpd?bill=s111-896
It's critical for clients to have a Realtor who is educated enough to review the proposed Loan Modification should you qualify for one. The client has to be able to determine through a cost benefits analysis, if the Loan Modification is the best solution to minimize their financial loss. In most cases a Loan Modification only delays a foreclosure. Without Principle Reductions, most loan modifications have the client owing more then they own now for a property that is not worth that much. Here is the Mortgage Bankers Association, latest National Delinquency Survey. http://www.mortgagebankers.org/NewsandMedia/PressCenter/68008.htm
As a Realtor Specializing in Short Sales and Foreclosure Avoidance, I provide my clients with the necessary information to make informed decisions in this volatile real estate market. In today's market it's critical to have a Realtor that can explain the benefits of doing a short sale VS a Foreclosure. The best solution should minimize your financial loss and limit the damage to your credit history. I educated my clients on how The Mortgage Forgiveness Debt Relief Act and Debt Cancellation works and can benefit you. http://www.irs.gov/individuals/article/0,,id=179414,00.html
One of the most important reasons I tell clients to consider all their options, especially short sales when trying to avoid foreclosure is, "Foreclosure is reported on all future Loan Applications, which will effect your interest rate, short sales are not." It's important to understand and be careful not to commit fraud by trying to obtain another home loan while defaulting on a mortgage. Line F, under Declarations asks if you are delinquent or in default on any Federal debt or any loan, including mortgages.
It is more important than ever before for home owners and buyers to work with a Certified Distressed Property Expert, especially with all the rapid changes that are constantly taking place in the mortgage and housing markets. For information on the Certified Distressed Property Expert designation follow this link. http://www.cdpenow.com/
Jennifer & Gary Ricco of Keller Williams VIP Properties strive to provide you with up to date information on how to avoid foreclosure. It's critical to select a Realtor who has the training & experience when facing foreclosure. Our goal is to minimize your loss severity and limit the damage to your credit history. For a free confidential consultation contact Jennifer & Gary Ricco at 661.290.3837. We provide assistance to homeowners in the Santa Clarita Valley, San Fernando Valley and Ventura County. Please visit our website at http://www.riccosellshomes.com/ Our Short Sale FAQ link is very informative.
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