Good Monday morning and WOW is it cold outside. New guidelines came out the end of last week from the US Treasury Department to make selling a home via the short sale approach easier. This could mean better buys for us all and easier sales if you happen to be in an unfortunate position.
To qualify under these new guidelines:
The property must be the home owner’s principal residence.
The home owner must be delinquent on the mortgage or close to defaulting (this is better than delinquent because usually once you are behind you only have 90 days...).
The loan must have been made before Jan. 1, 2009, and be for less than $729,750.
The borrowers’ total monthly mortgage payment must exceed 31 percent of their before-tax income.
Under the plan, borrowers will receive $1,500 from the government for selling homes for less than the amount of their mortgages. Mortgage-servicing companies will get $1,000 for each completed short sale. Second-mortgage holders can receive up to $3,000 of the sales proceeds in exchange for releasing their liens. Investors who hold the first mortgage can collect up to $1,000 from the government for allowing the payments. Borrowers who complete a short sale under the program must be "fully released" from future liability for the debt, according to the guidelines.
Source: Associated Press, J.W. Elphinstone (11/01/2009) and The Wall Street Journal, Ruth Simon (11/01/2009)
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