The Obama administration has announced a new short-sale program aimed at alleviating some of the roadblocks that now impede the process, which will hopefully inject some life into the nation's ailing real estate market.
According to a New York Times article, the program -- that will take effect on April 5 -- will help some of the five million households who are currently behind on their mortgages by compelling lenders to accept a short-sale arrangement in lieu of foreclosure. A short-sale can occur when a lender agrees to take less for a property than the amount owed on the mortgage, thereby avoiding foreclosure.
The program will not help everyone; those who have a second or third mortgage on their properties may have the subordinate lenders block the sale. But for those with only one loan, they will be able to get out from under a crushing burden with less of a negative impact on their credit rating, plus they will receive $1,500 in relocation assistance.
This is not a get-out-of-jail-free card. The homeowner must be able to document that they are under extreme hardship and have exhausted all their resources in an effort to stay in the home.
Our local housing market here in the North Georgia mountains has been as hard hit as most other areas of the country. The confusion surrounding short sales has only exacerbated the problem. If this new short-sale program works as promised -- and that is a big if -- this should help clear the way for renewed vigor in our housing market.
About The Author Barbara Martino-Sliva, Realtor® at TREASURE COAST/SOTHEBY'S INTERNATIONAL REALTY, VERO BEACH FLORIDA is the author of this blog and several other sites on the Internet. She has also been a guest speaker on an on-line radio program dealing with Florida and Vero Beach Real Estate and a columnist for the digital magazine FLORIDAYLIFESTYLEONLINE. Barbara is your Real Estate Connection in the Vero Beach area, and is always available to help you with your Real Estateneeds. If you have decided that quality of life in VERO BEACH is worth seeing, call her anytime at 772-321-4484 or to search for homes visit: www.VeroPremierProperties.com and her Vero Beach Blog: www.VeroBeachRealEstateVoice.com. Over 90% of all homes are found online. I create a dominating online presence for my clients properties. My Real Estate blog is highly indexed in GOOGLE.
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Hi Barbara: I just wrote a post on a mortgage banker who is blasting this program. Check it out and please leave a comment. I'm wondering how others are going to react to what he's got to say.
Barbara
I'm not sure that this program will help the housing market recover.
Good luck and success.
Lou Ludwig
It will be a great day when all of these short sales have been cleared out of the inventory!