Teri Powers CRS GRI

So many homeowners in my area are facing increasing difficulty paying their mortgage. Most of the people that I have talked with are decent people who got in over their heads because life dealt them something unexpected (loss of a job, major health problems, etc)...they don't want to default on their mortgage...they don't want to face foreclosure.
When counseling these people, I first recommend that they contact their lender and find out if they can refinance their existing mortgage into a mortgage with an affordable payment. Although current market conditions in NY are poor, things will turn around in a relatively short period of time, so if they can afford to pay close to their current payments, the bank is likely to restructure the loan to terms that can be lived with.
If the bank will not restructure the loan, then a short sale is the best answer for all parties involved.
It is most likely that the loan is quaranteed under some federal or state program so the bank can be paid back the amount of the loan that is 'short'. In addition, a short sale will save the bank approximately $30,000. in foreclosure costs. The property will be sold more quickly at a price that is more attractive to buyers. In our area, it will still take 3-6 months to complete a sale thus giving the homeowner time to put their lives back in order. And, with the recent federal decisions, the amount of the short sale is not taxable to the already economically stressed homeowner.
From the Realtor's point of view, short sales are highly stressful. The banks and PMI investors are quite demanding in keeping to very tight time frames for closing; they require a great deal of backup information to prove current market value and sufficient exposure of the property; they want buyers that are willing to risk the costs of sale in order to move toward closing quickly...all of this increases the amount of time that the Realtor must spend on the transaction which takes away from the amount of time that can be dedicated to doing new transactions.
Since we are 'commission only' salespeople, I understand why many Realtors won't work with short sales, however, there is a certain sense of satisfaction...a sense that I've help people (sellers) out of their difficulties and helped others (buyers) achieve their dream of homeownership...
It isn't always about the money!
Teri Powers CRS GRI, Keller Williams Realty - Tue Apr 22 2008, 09:04