Short sale primer: New rules may help homeowners
Originally published: April 29, 2010 5:12 PM
Updated: December 9, 2010 12:09 PM
By KRISTIN TAVEIRA Special to Newsday
Photo credit: None/ | This Brentwood home is on the market as a short sale for $219,000.
There’s a certain word beginning with F that nobody wants to hear these days – foreclosure, or lender repossession of a property on which the mortgage hasn’t been paid. It’s costly and time-consuming for lenders, humiliating and financially devastating for borrowers.
One way to avoid it is to try for the somewhat less-offensive S-word – a short sale, or a sale in which a property is sold for less than what’s owed on the mortgage. This month, short sales are on the path to becoming a little more attractive and easier to accomplish, thanks to the federal Treasury Department‘s Home Affordable Foreclosure Alternatives Program.
The program offers financial incentives to both the borrower and the mortgage servicer – that’s either the lender or a company hired by the lender to collect the payments and handle the accounting for your loan – in exchange for averting a foreclosure. The program also provides preapproved terms for a short sale. The servicer accepts the partial payment in full satisfaction of the loan. You can search a list of participating mortgage servicers at making homeaffordable.gov.
