In my Part 1 of this blog post, I pointed out a new study by Experian that showed an alarming number of homeowners who were electing to intentionally have their homes foreclosed upon by refusing to make their mortgage payments even though they can afford it. This trend which is now called a “Strategic Default” was accelerated greatly with the housing collapse of 2008, when homeowners suddenly found themselves in possession of homes that are now worth as little as half of what they paid for it, their home values have been reduced to the point that they feel like they are swimming in negative equity. Also the mortgage payment for many of these people have become more expensive than what they can pay as rent for a similar house—hence, they have made the financial decision to strategically default, to essentially walk away. Is this the right choice?

There is a better option

While this might seem like the only logical option for homeowners facing the situation described above, I believe a much better solution is the Strategic Short Sale. In case you’re not familiar with the term, a short sale is the sale of property in which the amount received for the property is less than (or “short of”) the balance that the homeowner owes on their loan. A strategic short sale is a modified form of this process. If you’re a homeowner, a strategic short sale would be a situation where you’re able to continue making your payments on the home loan, but you’re upside-down on it. Usually, you would be behind on the payments, but it’s even possible that you might be current on your payments.  However, because you owe more than the property is worth, you would seek a strategic short sale because you need to unload it because it has become such a negative investment.

When you opt for a strategic short sale, you’re making a business decision. You’re deciding to accept a slight decrease in your credit score (as a result of the short sale), the possibility that your lender might ask you to share in the loss by coming to closing with some cash or sign an unsecured promissory note in order to get rid of an upside-down property and to decrease your debt load.

Please note that both the cash option and/or the promissory note option will be negotiated on your behalf with your lender by your real estate agent on terms that you can afford. Hence it is of utmost importance to have a discussion with your agent on what those terms should be ahead of time.

Why is a Strategic Short Sale better than a Strategic Default

Let’s look at several ways in which a strategic short sale is preferable to a strategic default.

• Although both a short sale and default will negatively impact your credit rating, the short sale will not affect it as badly as a foreclosure will.
• Opting for a short sale will allow you to qualify for a decent mortgage with two years as opposed to a foreclosure which will put you at a disadvantage; for instance Fannie Mae just came out with a new lending guideline that punishes homeowners for strategically defaulting by not allowing them to qualify for mortgages until 7 years after the foreclosure.
• Many banks, because of the state of the economy, will be willing to accept the property’s current market value and consider it “payment in full.” This is preferable to them over the time and costs involved in foreclosing on the property.

Is a Strategic Short Sale right for you?

My point is not to say that a strategic short sale is for everyone. So if you’re able to afford your home and you’re still happy in it despite the significant loss in value, then keep on making your mortgage payments and keep your property. After all, my assumption is that you bought the home to live in long term, and if this is the case, years from now the market will eventually correct itself and your home will eventually begin to gain value hence positive equity.

What is the process for moving forward with a Strategic Short Sale?

There are four main steps involved:

1. Hiring a real estate agent who has experience with getting short sales approved
2. Finding a buyer
3. Putting together the paperwork required by the lender from the homeowner and the buyer
4. Negotiating the short sale and getting it approved by the lender so that the home can be sold to the buyer and hence allow you to avoid foreclosure

Of course, these steps are more complicated than those four simple statements. That’s why it’s so important that you work with a seasoned professional to help lead you through what could be a minefield. Not too many lenders are going to give you a “do-over.” In other words, if you try to get the short sale approved by yourself, without any expert guidance, and if you make a total mess of things, don’t expect the lender to listen to you a second time after you finally decide to hire a professional.

Remember also that a short sale often takes longer to complete than a regular sale, since lenders must spend some time deliberating over it. However, it doesn’t take as long as many people fear. And in most cases, you save time, because you’ll typically be able to buy a new home in a shorter time following a short sale than you would be after a foreclosure. In the end, a strategic short sale will save you years worth of headaches trying to get into a new home.

Questions for you?

• How is housing in your area? How many foreclosures are you noticing?
• Do you see it improving or getting worse? Please tell me what you’ve personally noticed.

Visitors who read this post also read:

• Strategic Default Vs. Strategic Short Sale; which one do you think is the best choice? – Part 1
• Should I Strategically Default on my mortgage and “punish” Fannie Mae?
• Townhouse For Sale Bowie Maryland Short Sale 11201 Westport Dr Home

There was an article on the Los Angeles Times website a few months ago that discussed the increasing problem of Strategic Defaults in the United States. I want to tell you why the study cited in the article is right and why this is a growing problem that is gradually reaching crisis proportions in America. Then on my next blog post (Part 2 of this series), I will show you why Strategic Short Sale is the solution.

This LA Times article cited a study conducted by Experian, one of the three national credit bureaus.  They studied the credit files of 24 million Americans and discovered that “homeowners who have high credit scores when applying for a home loan are about 50 percent more likely than low-scoring borrowers to go into strategic default.” In other words, they intentionally and abruptly abandon their mortgages. (SEE ARTICLE http://www.latimes.com/classified/realestate/news/la-fi-harney20-2009sep20,0,2560658.story)

Findings from the study:

• Roughly two-thirds of strategic defaulters have just a single mortgage from which they’re walking away.
• The number of homeowners who strategically defaulted in 2008 was 588,000; double the number from 2007. This strongly hints that the homeowners did this as a response to the “Great Recession”, which hit hardest in 2008.
• Strategic defaulters were 18 percent of all serious delinquencies which extended for longer than 60 days into the fourth quarter of 2009.
• The homeowner with a larger mortgage balance is more likely to walk away from the mortgage than the person with a lower balance. Also, someone with credit scores in the two highest categories are more likely to opt for a strategic default than those in the lower score categories.
• None of this appears to be done by ignorance on the part of the homeowner who defaults. The study suggests that someone who defaults strategically and as a result, loses the house, is completely aware that this would be the outcome. They further understood all of the future negative ramifications of their action. The TIMES quotes one person who worked on the study who said that the strategic defaulters are “clearly sophisticated.” Her reasoning was that they seemed to make intelligent decisions as to where to make payments and when. They didn’t default on equity credit lines until after bailing out on the primary mortgage, for instance, presumably to receive more cash on the equity line.

My opinion of the study:

Although 588,000 strategic defaulters is an incredibly high number already, I believe the number will unfortunately continue to rise. I say this because many option ARM and interest-only products will be hitting recast dates from now through 2012. This will seriously impact the borrower’s monthly payment. A great many of these loans are far below loan modification program caps of being underwater. It’s possible for someone to have a $600,000 on a property worth just $300,000.

Frankly, before the Great Recession of 2008 struck, most homeowners would have said that they would not consider a strategic default, because it seemed somehow wrong.  It was as if they were walking away from their responsibilities.  But desperate times call for desperate measures, and the housing crisis caused thousands to reconsider this position—and to conclude that caring for their families required that they default.

Put yourself in the other guy’s shoes. Suppose you bought a home for $500,000 during a housing bubble. You figured that a worst-case scenario would be selling the home for $600,000 or $700,000 in three or four years when your loan recast.  Now, however, your home is worth only $300,000. And it may never reach $500,000 again, let alone $700,000. Your payment might jump up to $3,000, from its previous amount of $1,500 monthly. You think about the fact that you could rent a similar home for less than that. This is the position that thousands of home-owners are in. In their eyes, a strategic default is the only smart move, and some would say that they might be right.

In my view there’s a better solution for many of them; this solution is the Strategic Short Sale. This solves most of the same issues as the strategic default, and yet quickly creates a brighter future for the sellers. We’ll talk about this solution in detail on my next blog post, and why it’s usually preferable to the strategic default.

Questions for you:

• How do you foresee the housing market playing out over the next several years?
• Tell me what you predict will happen regarding the economic recovery and how you think this will impact homeowners.

Visitors who read this post also read:

• Strategic Default Vs. Strategic Short Sale; which one do you think is the best choice? – Part 2
• Should I Strategically Default on my mortgage and “punish” Fannie Mae?
• Townhouse For Sale Bowie Maryland Short Sale 11201 Westport Dr Home

In a previous blog post, I mentioned that one of the documents required by lenders in order to begin the short sale process is a hardship letter. I will now take some time to explain what it is, why you need it and how to write one. I will even include an example that you can remodel to suit your own true situation.

In my opinion, the hardship letter is one of the important documents you’ll be expected to submit to your mortgage lender because it gives them a snapshot of the financial distress that you are experiencing. It is basically is a signed and dated one page letter (handwritten or typed) through which you explain the reasons why you are having a difficult time making payments. You can also include information on what you have done so far to resolve the situation and why you need the lender to approve the short sale in order for you to avoid foreclosure. Of all the other required documents, the hardship letter leaves the most room for creativity, and therefore the most potential to confuse people as to what it should contain.

Tips that you should keep in mind as you prepare the hardship letter:

• You cannot use someone else’s letter as your own; your letter must be truthful.
• However, you should try to make the letter dramatic. Tell a dramatic story in a dramatic manner.
• The letter should evoke emotions and sad feelings from the person who reads it.
• Most importantly, the letter must present at least one documented, valid reason why you’re no longer able to afford your home.  Some acceptable reasons could include sudden unemployment after you’d already bought the house; large, unexpected medical bills; incapacitation and an inability to work because of an accident or illness; skyrocketing interest rates which have left it impossible for you to make payments. (Generally, reasons such as bad buying decisions, pregnancy, moving into an apartment or smaller home, or being unhappy with the neighborhood will not suffice.)
• A timeline of events that led to your inability to pay the mortgage.
• An explanation of the steps you’ve taken to try to correct your financial challenges.

Remember that your hardship letter should be concise yet thorough. The lenders want to have enough information to help with making a decision, but they don’t want to know every minute detail of your life.

Below is a sample hardship letter. I have included it as a means to guide you on how to write yours, because, as I said above, your letter should be totally your own, with your own personality, your own life story, and your own challenges given. Remember that I’m only showing you this letter so that you have an idea of how to put all of the elements together.

Dear Loss Mitigation Officer:

I am an electrical engineer by trade. Recently, I was laid off from a job that I’ve had for 19 years due to the recession. I was one year away from retirement, yet there was nothing they could do to take care of me. That means I’m at a loss now to take care of my family.

My wife has taken a job to try to help out with our situation.  Unfortunately, all she managed to get is a minimum-wage job at a local convenience store. Our life savings is drained, and even with my wife’s new income of $325 a week, we are far short of being able to afford our mortgage payments.

As a result, I am embarrassed to tell you that we’ve had to move in with my brother, who has given us one bedroom and a small study to turn into our “living room.”

We have hired a real estate agent, and fortunately, he found a buyer for our property. Their purchase agreement offer is $____________ (the property’s current market value). The offer is less than what we need to pay off our first and second loans for the property. Still, the offer is a good one, but I must have the first and second lenders agree to work with us on a short sale and accept short payoffs

I have attached my authorization for my real estate agent and escrow officer to speak with you.  The real estate agent is _________________ and the escrow officer is ________________. with (Title company). I’ve also enclosed this with this letter all the other required documents needed for you to approve the short sale.

Thank you for your time and consideration in this matter.

In conclusion; while your letter should be considerably different from this, hopefully you understand the elements that your lender will want to see in it.

Questions for you:

Given the chaos that is going on in the homeowner’s life at the time, do you think the process of requesting a short sale is too complicated? If so, how could it be streamlined? I will like to hear your thoughts!

Visitors who read this post also read:

• Short Sale VS Foreclosure VS Deed-In-Lieu of Foreclosure; which of these represents the best choice for a homeowner in distress
• Documents required by lenders in order to begin the Short Sale process
• Strategic Default Vs. Strategic Short Sale; which one do you think is the best choice? – Part 2

Disclaimer: I am not an attorney, I do not play one on my blog so please do not assume I am practicing law or giving you any legal advice. If you need an attorney, please take the necessary steps to hire one!

On April 4, 2008 a new foreclosure law in Maryland went into effect. All foreclosure proceedings after that date have to follow this law. The law outlines a series of steps that your lender will have to carry out within a specific timeline in order to foreclose. This effectively gives you – the homeowner enough time to find a solution to your problem and avoid a foreclosure as well as the negative consequences it will have on your credit rating. Having a foreclosure filed against you will prevent you from acquiring a loan for a new house within 5 to 7 years after the foreclosure even if your financial situation improves.

Let us go through the timeline and steps lenders have to follow before a foreclosure case can be filed and then eventually execute the sale of your house.

Steps your lender must follow before they file the foreclosure case.

The law requires your lender to first wait 90 days after your loan has been in default before they can begin the initial foreclosure process. In addition, they must send you a “Notice of Intent to Foreclose” 45 days before the actual foreclosure case can be filed at the court house, which makes a total of 135 days; hence you have more than enough time to find a solution(s) to avoid the foreclosure. The notice which the lender files will inform you of their plan to foreclose your house and it also contains the following information:

• why the loan is in default
• The amount needed to bring your loan current
• The date of your last payment
• How to get in touch with your lender, or the office/ person in charge of collecting your loan payments.

This information is meant to give you a clear summary of your financial obligation to the lender.

Steps your lender must follow when they file the foreclosure case.

The law requires your lender to file the case with the county court where your home is located. Your lender has to submit these documents to the court at the time of filing the foreclosure case:

• A copy of the Notice of Intent to Foreclose;
• Certification that you are not enlisted military personnel because enlisted men and women have certain special rights when cases are filed against them.
• The original or certified copy of the assignment of the mortgage if the mortgage was assigned or bought by another lender;
• A detailed estimate of the total sum of money payable to your lender under your mortgage agreement which includes the initial amount owed, interest and monthly charges, late charges, attorneys’ fees and other applicable fees.
• An affidavit of ownership and a copy of the debt instrument;
• Declaration, under oath, indicating the date of default, the type default and the day they sent you information of their intention to foreclose your property;
• Original or certified copy of the deed of trust or mortgage;
• A uniform Notice regarding the filing of the foreclosure action; and
• The mortgage lender and originator’s license number if applicable.

Take note that the case can only be filed 90 days after you are in default of your loan, and 45 days after you have been notified by the lender via a Notice of Intent to Foreclose. The documents the lender is required to submit to the court needs to be properly documented. Any document submitted by the lender containing an error or false information can be used by you to stop the foreclosure proceedings. That is why lenders have to ensure that all information filed with the court is correct and properly documented. You must be given a copy of all of these documents.

Steps your lender must follow after they file the foreclosure case.

• They must personally give you a copy of all the documents that they filed at the court. Your lender has to deliver to you copies of all the documents that were submitted to the court when they filed the foreclosure case against you. If after two attempts on two different days, they are not able to serve you the documents, then the lender must file an affidavit to the court relating the attempts to deliver the documents to you. After that, the lender may deliver the documents to you by using both First Class and Certified Mail as well as post the court papers visibly on the property. In doing this, you will not be able to tell the court that you were not informed by your lender because you never received the documents.

• Your lender must wait an additional 45 days from the time you received the foreclosure documents before they can hold a sale of your property. The lender has to advertise “Notice of Sale” of your house in a newspaper with general circulation in your county for three weeks back-to-back. The first ad has to be published no less than 15 days before the date of the foreclosure sale, and the last publication should not be more than 7 days before the sale. Your lender has to inform you of the time, date and place and the terms of the sale through certified and first class mail. You should receive the information not later than 10 days before the date of the sale. The sale will not stop if you fail to receive the letter informing you of the foreclosure sale.

Note that you can stop the foreclosure one business day before the sale by paying a certain amount as determined by your lender which will include missed payments, late fees and costs. Upon request, your lender will provide you with the exact information on how to cure your loan and provide instructions how to deliver the payment.

In conclusion, the April 2008 law gives Maryland homeowners a lot of time to remedy their situation. The entire process can take more than 6 months; from the time your loan went into default, to the time you end up losing your home to foreclosure. This will only happen if you choose to “dig your head in the sand” and do nothing. That said; I am positive you are the proactive homeowner; otherwise you would not be reading my lengthy blog post. The mere fact that you are here proves to me that you have chosen to “grab the bull by the horns” and find a solution that will help you avoid foreclosure. Congratulations! You are on the right track, now allow me to propose a solution for you – it is call a Short Sale.

The first step you need to take is to find a local Real Estate Agent to help you with a Short Sale

Within the 90 day period that the law prevents your lender from moving forward with the foreclosure proceedings against you, I suggest you find a real estate professional that can help to analyze your situation and find out if the best option for you is to sell your property through a short sale. The reality is that short sales tend to take time and the earlier you get started, the better your chances are of selling the property before the foreclosure. Even though your situation might be difficult and emotionally challenging, be encouraged by the fact that your actions to seek help from an agent at the early phase of the foreclosure will yield a better result and increase your chances of taking back control of your financial situation and getting the peace of mind you deserve.

For more information on the short sale process, read my blog post titled “Take a dose of the Short Sale pill from your local Realtor to relieve your Mortgage payment Headaches”. Also read my blog post on the Home Affordable Foreclosure Alternatives (HAFA) guidelines to determine if you qualify for HAFA and its benefits.

I hope this blog post gave you a clear understanding of the Maryland Foreclosure Law, the timeline and the requirements your lender has to follow before being able to foreclose your property? Please, take time to share your thoughts, questions and ideas with me and other readers to this site by leaving a comment below.

Visitors who read this post also read:

• The HAFA Guidelines for Maryland Homeowners who need a Short Sale in order to Avoid Foreclosure
• Short Sale VS Foreclosure VS Deed-In-Lieu of Foreclosure; which of these represents the best choice for a homeowner in distress
• Documents required by lenders in order to begin the Short Sale process

This is an announcement for a Townhouse I have listed For Sale in Bowie MD 20720 – Short Sale:

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For complete information of this property directly from the MLS; Call 301-841-7593 for more information OR go to

http://budurl.com/11201WestportDrBowie

Watch the video walkthrough of this home and leave you comments on my blog

Visitors who read this post also read:

• Single Family Home For Sale Bowie Maryland Short Sale 3416 Inverwood Ln Houses
• Condo Home For Sale Beltsville Maryland Short Sale Houses 10402 46th Ave Unit 202
• Short Sale Condo For Sale Bowie Maryland 4807 River Valley Way Homes Houses

I know the title got your attention but before you pass judgment, I suggest you read the entire blog post and then tell me what you think by leaving a comment.

Why do you want to strategically default?

A few years ago, you applied for a mortgage to buy a home for your family to live in and have a roof over their heads. It was meant to be an investment, a means for you to increase your total net worth and move up to the next level in life. You were so glad the bank approved your loan that immediately after buying the house, your family moved in and you began to live the American Dream of Home Ownership or so you thought. Not too long after that the dream became a nightmare; the economy began to tank, you had problems with your job and you bills started piling up. You started having a hard time keeping up with your mortgage payments. Even then, you kept on paying your mortgage.

A few months back, you learned that the value of your “dream home” – the one your family lives in, the one you borrowed money from the bank, the one that you keep paying the monthly mortgage because it’s the right thing to do – is less, so much less, than the initial amount of the loan that you got from your lender. After all, your home was meant to be an investment, and according to what you were told, overtime you were supposed to pay down the mortgage and build equity. So you ask yourself – “Should I keep paying the mortgage for this house when its value is less than the amount that I am paying for?” That is very good question, and in this blog post I have attempted to answer it and suggest options that you have available to you that you might have not been aware of. So please keep reading!

Strategic Default- what’s that?

According to Wikipedia “A strategic default is the decision by a borrower to stop making payments on a debt despite having the financial ability to make the payments”. Let it be clear that my personal and professional opinion on this matter is that it’s morally right to follow through on your obligations to your lender and the main reason I have taken the time to blog about this sensitive topic is to make sure you know that you have an option called a “Short Sale” that will greatly benefit you and your lender. Even though it might seem that the right choice is to simply walk away from a bad debt; stop paying, give up and live your lender to sort out the mess. I am here to say that there is another way! Before I explain what short sale is and why it’s a better choice, let’s back up a little bit.

Why do you have to keep paying your mortgage?

Paying for something that is less in value than the amount that you are paying for it is actually silly. Yes, that’s right. It is out right silly. When companies make an investment that turns out being bad, guess what? They retract, regroup and cut their losses. Why pay a hundred grand for a car that is only worth 60?

But in reality, when you got the loan, the property was valued at a higher amount than what it is now and most people expected values to keep rising. After sometime, maybe 2 or more years, property values went south, and your loan amount ended up greater than the property value. When you bought the home, no one had an idea that property values would go south because values had been going up for years prior. You had an agreement with your lender that you will pay for the mortgage, and pay a certain amount every month until you pay up the whole amount, including interest.

If you did not agree to pay for X number of years, your lender would not have given you the money to buy the house in the first place. You and your lender made an investment decision but instead of strategically defaulting, I suggest you move in another direction, one that not only shows that you are morally right but puts you and your lender in a much better situation.

Why a Short Sale is the best option?

Even if not paying your mortgage seems to be the logical thing to do; there are still other options available such as a short sale. The effect of a short sale on your credit is minimal when compared to a foreclosure. When you walk away from your mortgage, your lender will foreclose your property. When your property is foreclosed, your credit rating takes a huge hit, and you will not be able to get a mortgage to acquire another house for the next 7 years, even if your financial situation improves. Why? Because you walked away from your mortgage obligations and your house got foreclosed. That’s why. On the other hand if you sell your property as a short sale you will be able to qualify for a mortgage within 2 years and buy another home, assuming your financial situation gets better.

Why you should not strategically default on your mortgage?

You can avoid a foreclosure by being upfront with your lender and telling them that though you want to keep paying your mortgage, it’s not financially feasible. Point out the fact that your property’s value is “underwater” – meaning – less than the remaining amount of the loan that you took out a few years ago.

This under normal circumstances will qualify you for a short sale. You can sell your property at a price that reflects its current value which is less than the amount that you owe your lender. Previously in a short sale, all the proceeds of the sale will go to your lender but now assuming your lender follows the Home Affordable Foreclosure Alternatives (HAFA) program outlined by the Treasury Department for short sales, you can get $3,000 towards your moving expenses. Your lender will agree to accept the payment from the sale, and forego the amount that is “short” of the total amount that you owe them.

In a short sale, you avoid foreclosure. Your credit rating does not take a big hit. And you can purchase another home after two years.

As a professional real estate agent, I favor a short sale instead of a strategic default. A short sale is more advantageous to you, while a strategic default can be disastrous.

Read my other blog posts so you can learn more about short sales. If you are a homeowner in Maryland in need of a short sale I will like to be of service to you and answer all the questions that you might have. Click this link and completely fill out the questionnaire to get a hold of me immediately!

So what do you think, should homeowners strategically default on their mortgage or sell their property as a short sale? Please leave your comments and questions on my blog, I am eager to get your opinion!

Visitors who read this post also read:

• Short Sale VS Foreclosure VS Deed-In-Lieu of Foreclosure; which of these represents the best choice for a homeowner in distress
• Documents required by lenders in order to begin the Short Sale process
• What is a Short Sale and why you should have one done for you by a Licensed Real Estate Agent

In a nutshell, the Home Affordable Foreclosure Alternatives (HAFA) Program which kicks off on April 5th, 2010 is for those homeowners who have decided that “enough is enough” and have chosen to take control of their situation by getting their property sold by a Real Estate Agent by means of a Short Sale. Please read my previous blog post titled “Take a dose of the Short Sale pill from your local Realtor to relieve your Mortgage payment Headaches” to get an idea what a “Short Sale” is all about.

In that post, I stated that the “short” in a short sale transaction means that the property in question ends up selling for less than what the borrower actually owed their lender. Up till now, it did not mean that the transaction will be a quick or fast sale. In fact, the short sale process usually takes a lot of time to negotiate successfully and – can become frustrating to many homeowners as well as their Real Estate Agents.

The good news is that the HAFA guidelines are meant to make short sales alot faster, and more transparent to all those involved but I know what you are thinking, you are saying to yourself – “What will HAFA do for me and my situation?” Allow me to walk you through the guidelines and it’s proposed benefits.

What is HAFA and how is it of benefit to me?

This program is a subset of the Home Affordable Modification Program (HAMP) program and is for homeowners who are unable to retain ownership of their homes due to their current financial distress.  HAFA provides incentives to qualified home owners.  One major incentive is that borrowers are to be completely released from any amount owed on the mortgage balance as a result of a successful short sale. This applies to both the first mortgage lender as well as the second. Hence, the lenders are not allowed to request for any cash contribution, have the borrower sign a separate promissory note or go after the borrower for the balance by means of a deficiency judgment. Also homeowners are given $3,000 to cover their moving expenses (note this was previously $1,500 and it was recently increased. Either way, I think this is a much needed answer to many homeowners prayers).

How do I qualify for this program?

To qualify for this program you must beyond a doubt be able to say YES to all of these questions:

1. Is the home you are staying in now, your principal residence?
2. Was the the first mortgage on your property issued before 2009?
3. Are you in financial distress? Are you behind on your mortgage payments or do your foresee a predictable default?
4. Is the unpaid principal balance of your mortgage less than $729,750?
5. Is your monthly mortgage payment greater than 31% of your gross income?

If your answer is yes to all the question above then you qualify.

So how does HAFA streamline the Short Sale process?

• Notification

Your loan servicer is directed by the HAFA guidelines to consider you for the HAFA program within a month after one of these things happen to you:

• • You fail to qualify for a HAMP trial period plan.
  • You do not successfully complete a HAMP trial period plan
  • You missed at least two consecutive payments on your HAMP modification
  • You requested for a short sale

Your loan servicer is tasked to communicate to you that you are qualified for a short sale, and you are given 14 days to respond to their notice. If you will not respond within this time frame, you will lose your qualification.

• Short Sale Agreement

You are given 14 calendar days to sign and return a Short Sale Agreement (SSA) to your loan servicer from the date the document is sent to you. Once signed and returned, your lender then allows you to sell your house within a 120 days by means of a Real Estate Agent (Hopefully you choose me).

• Purchase Offer

Within three business days after a purchase offer is received, you or your agent is to submit a completed Request for Approval of Short Sale (RASS) to your loan servicer. Upon receiving the RASS with the complete set of attached documents, your servicer is given 10 business days to advise you whether your request has been approved or denied.

• Closing the Short Sale

Your loan servicer may request the sale close within a reasonable timeframe but is not allowed to demand a closing less than 45 days from the date of the contract for sale without your consent. This is mandated so as to give you enough time to move out of the property. Within 10 business days after receiving the short sale proceeds your lender has to fully release their mortgage lien and the investor has to waive the right to seek deficiency judgments and may not require a promissory note for any deficiency.

Conclusion

HAFA is a fast track approach to implementing a Short Sale. Most home owners facing financial distress in Maryland can make use of this program as from April 5th, 2010. That said, you need to proactive and quickly make the decision to free yourself from the headaches and worries of foreclosure.

By writing this blog post I have taken the liberty to simplify the 45 page document that serves as the new guidelines for the implementation of HAFA. So please feel free to download the entire PDF document and read it yourself because now is the time to grab the proverbial “bull by the horn”, remove your head from the sand (also known as the Ostrich Symdrome) and go get a local Maryland Real Estate Agent who understands the HAFA guidelines in it’s entirety to list your property and negotiate a short sale with your lender on your behalf.

If you have questions about this blog post, or an idea to share, please feel free to leave a comment.

OR

If based on what I have discussed so far you feel I am the right agent to help negotiate your short sale then I will be glad to assist you as well. Click this link and I will get back to you immediately

Visitors who read this post also read:

• Short Sale VS Foreclosure VS Deed-In-Lieu of Foreclosure; which of these represents the best choice for a homeowner in distress
• Documents required by lenders in order to begin the Short Sale process
• What is a Short Sale and why you should have one done for you by a Licensed Real Estate Agent

This is an announcement for a Single Family Residence I have listed For Sale in Bowie MD 20721 – Short Sale:

SHORT SALE deal. Submit AS IS offers for this Well maintained Single Family Home (Colonial) with 3Br/3Ba. Its a beautiful home with ceramic tiles in the kitchen & foyer. Totally updated from top to bottom, finished basement, Wood floors, storage shed, large backyard and more.

For complete information of this property directly from the MLS; Call 301-841-7593 for more information OR go to

http://www.budurl.com/3416InverwoodLn

Watch the video walkthrough of this home and leave you comments on my blog

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This is an announcement for a Condo I have listed For Sale in Beltsville MD 20705 – Short Sale:

SHORT SALE deal. Submit AS IS offers for this Well maintained Condo with 2Br/1Ba on main level. Its a beautiful home with ceramic tiles in the kitchen & foyer. The community has a playground and an outdoor pool. All utilities are included in condo fee. Close to shopping, Univ of Maryland College Park & transportation.

For complete information of this property directly from the MLS. Call 301-841-7593 OR go to

http://BudUrl.com/1040246thAve202

Watch the video walkthrough of this home and leave you comments on my blog

Visitors who read this post also read:

• Townhouse For Sale Bowie Maryland Short Sale 11201 Westport Dr Home
• Single Family Home For Sale Bowie Maryland Short Sale 3416 Inverwood Ln Houses
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I am offering a Free Short Sale Seminar for Maryland Homeowners on How to Stop Foreclosure. This is a community outreach program I am offering to the Maryland public in order to meet my goal of helping 67 families avoid foreclosure in 2010 (See Press Release for more details – www.budurl.com/VowToHelpMDFamilies)

Title of the Seminar: What is a Short Sale? Is it right for me?

Cost of the Seminar: $Free.99 = Its totally free!

Topics to be covered:

1. The new Treasury department’s Short Sale Guidelines, the benefits and how it will affect you
2. Can A Short Sale Prevent Foreclosure?
3. Do I Have To Be Behind On My Payments?
4. What Is A Recourse Loan?
5. Dealing With A 2nd Lien Holder…Does It Affect The Sale?
6. How Long Does A Short Sale Take To Complete?
7. Are There Tax Ramifications?
8. How Does A Short Sale Affect Credit Scores?
9. Can I Live In The House While It Is Up For Sale?
10. Short Sale –vs- Foreclosure?
11. Bank Pays Commissions – It’s Free To You…You Pay NO Realtors Commissions

Venue:

Online off course by means of modern day technology! So schedule an appointment at your convenience and free time. First become a fan of my FaceBook page, then make your appointment and I will be available to answer all your questions:
(link to my FaceBook page www.budurl.com/ShortSaleSolutions)

To get updates on short sales and other foreclosure related information you will also have to follow me on Twitter:
(link to my Twitter profile @PropertyLion)

Time: You schedule the appointment and I will be there for you. I am at your service! Call me now @ 301-221-8929 to schedule an appointment

This is a community outreach offered by a local real estate agent that is
a member of the community and is a Certified Short Sale Specialist.
If you or someone you know is struggling with house payments or a great
deal of negative equity this discussion will benefit you.
Completely confidential and no obligation, I am here to
help.

Owen McGab Enaohwo
301-221-8929

Maryland Realtors

Visitors who read this post also read:

• Attention Maryland Homeowners in Financial Distress! Treasury just made Short Sales a lot simpler…
• Maryland Short Sale Specialist | MD Expert Realtor Help
• Is a Short Sale Right for You? Read and then Decide!