One option which foreclosure troubled homeowners can resort to is short sale. Under the said method, although homeowners would not be able to keep their property, they would be able to prevent foreclosure.
Fannie Mae, one of the biggest mortgage companies in the country, has devised a system so that homeowners can take advantage of the short sale option. The company is working on a new program in which short sales would be pre-approved. The program targets the areas which are greatly affected by the housing crisis, two of which are Orlando and Phoenix.
The program is expected to speed up the process of a short sale which normally takes a long time. Fannie Mae will agree on a sales price of a property about to be foreclosed and the expected loss before a transaction is settled.
A short sale is one option when a homeowner is no longer capable of repayment. Upon approval of the lender, the homeowner would sell their property for a price lower than their debt the lender to prevent foreclosure. Most of the time, the remaining obligation of the homeowner is forgiven.
The Valley has experienced an increase in foreclosure incidence over the previous year. Short sale efforts of homeowners and real estate agents have always fallen short because homeowners and lenders would not agree on a sale price, not to mention the long time that a short sale usually takes.
The short sale program is expected to be launched soon through the joint efforts of Fannie Mae and the Arizona Regional Multiple Listing Service. It will focus on properties under Countrywide Financial and which are expected to sell for an amount lower than the mortgage balance.
If the short sale program turns out to be a success, it will be implemented across the country. This is but another measure to combat the foreclosure crisis.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.