Pat Settar

Hmmm this is a difficult one to answer based on what you consider "risky!" Here are some thoughts on the pros and cons of each. There are new guidelines that are coming into effect on the short sale process. The Making Home Affordable program is being managed by Treasury and Fannie Mae. It covers more than 85% of mortgage loans, including loans owned or guaranteed by Fannie Mae or Freddie Mac, FHA loans, and loans managed by about 50 of the major servicers. For these loans, the new MHA policies and processes are mandatory.
The "risk" is that there are tens of thousands of loss mitigators out there who have to be trained before the new program will be implemented in a consistent way. The good news is that in the future it should be more of a streamlined process for the short sale purchase. I've put offers in on plenty of short sales and waited it out for 9-11 mos. only to get no response at all from the bank. The "risk" for some buyers in a foreclosure is often the property is left vacant for a much longer period of time while the bank sends out their inspectors and appraisers etc. and a short sale is generally occupied. If your considering a short sale and if your banking on getting the tax credit you need to be undercontract by 4/30/10 to be eligible. You also run the risk of affordablity with not being able to lock in your interest rate since you have no idea as to when you will settle. With that being said please know that some short sales may get a quicker approval than others. Each transaction is an isolated situation depending on the lender and seller. Working with a Realtor is in your best interest, they will help guide you through this ever changing process. - Wed Dec 2 2009, 06:04