Facing foreclosure can be very stressful for a homeowner. If you owe more than your home is worth in today’s market and have a hardship, you have options to help you get rid of the home with dignity and sell through a short sale. First, you should consult with your CPA or professional tax person and an Attorney who know about bankruptcy and real estate.

Here are some examples of a hardship:

• Family illness or injury
• Illness or injury in the extended family – particularly if it forces relocation
• Job relocation when the property is equity deficient
• Job loss or significant income loss
• Divorce or split of domestic partners
• Adjustment in mortgage payment or unforeseen increase in living expenses
• A mortgage payment that is simply un-manageable

After consulting with a CPA and Attorney and deciding that a short sale is best for you situation, there are two kinds of short sales. HAFA (Home Affordable Foreclosure Alternatives) and a regular short sale. The HAFA short sale is only for those who occupy or have occupied the subject home within the last year and the loan was originated before January 1st, 2009. There is no recourse or promissory note that you would have to pay later. The loan servicer gives you $3,000 at closing to help you with relocation expenses. If you want to try this way, you must try a loan modification first, which is called HAMP (Home Affordable Modification Program). If you are turned down for this program, you can go forward with the HAFA short sale. If you do not occupy the home, you may be able to sell the home through a regular short sale.
When choosing a real estate agent to represent you, ask if they are a Realtor. A Realtor must abide by a higher standard of practice and ethics. Also, ask if they are trained and certified to handle short sales. Do not pay a real estate agent or Realtor any fees up front or at closing to handle and negotiate the short sale for you. It is illegal. Using a local Realtor and/or one who knows your real estate market will be to your best advantage. Most banks will not accept an extremely low price for the home. Putting a low listing price will only get low offers, then cause a problem with getting the short sale approved and possibly end in foreclosure instead of a sale for you.

I hope you find this information helpful in making a decision to sell your home, or please give to someone you know who needs help. Please contact me!