Santa Clarita Real Estate Specialists: Loan Modification Denied - Short Sale to Avoid Foreclosure

Short sale to avoid foreclosure after loan modification has been denied

In 2007, the Mortgage Debt Relief Act was passed in an attempt to help millions of homeowners who, due to the housing crisis and economic crash, became upside down on their mortgages. The act helped homeowners, who completed a short sale, avoid paying tax ramifications on the shortage, which is considered taxable income.

The Mortgage Debt Relief Act, however, was only intended to be a temporary solution, which is set to expire at the end of 2012. There is a bill in Congress that would extend it, but it is unclear if it will pass. For distressed homeowners, this means that time is limited to take advantage of this program.

According to the governments Making Homes Affordable HAMP (Home Affordable Modification Program) guidelines, homeowners who don’t qualify for or have failed to make payments during a trial modification can utilize a short sale as the next viable options to avoid the sting of foreclosure.

MHA’s, HAFA (Home Affordable Foreclosure Alternative) program is streamlining the short sale process. Currently short sales are being approved within 45 to 50 days. Many lenders have mimicked HAFA with their own internal streamlined short sale program for borrowers who don’t qualify for HAFA. We have even starting seeing traditional short sale approvals with cash for relocation assistance.

If you have been denied a loan modification and have been issued a Notice of Default or a Notice of Trustee Sale, contact us ASAP. You time in running out. Jennifer and Gary Ricco at ReMax, Santa Clarita's real estate specialists have the ability to help you avoid foreclosure now.

Jennifer & Gary Ricco
Realtors

Phone: 661-803-2093

E-mail: Jennifer@JenniferRicco.com