Congress admits that the Home Affordable Modification Program (HAMP) was just another government program that has raised false hope for Americans. This program was launched in 2009 with the intent of lowering mortgage payments and saving foreclosure for 3 million to 4 million homeowners. But fewer than 500,000 borrowers have received permanent loan modifications, and the program has been criticized as a failure.
On Tuesday, March 29, 2011, eleven Democrats joined Republicans and the House voted 252 to 170 to stop any new funding of the program.
A foreclosure can result in a deficiency. In most states, the lender reserves the right to pursue you for the difference that you owe versus what the property is resold for after foreclosure. “Giving your keys back” to the bank probably does not protect you from the debt.
Short sales can take a long time. There are various factors that effect the length of time that a short sale can take.
Do you have more than 1 loan? -If you have multiple loans, then there are more than one lender to negotiate with.
Who are the lenders? -Not all lenders are created equal. Some are more willing to work with you than others. An experienced short sale Realtor can guide you through which lender typically is easier to work with.
Do you have a valid financial hardship? -If your hardship is valid, the lender will more likely not give you problems. Most hardships that they accept have to do with 1) Changes in Money, 2) Changes in Family, or 3) Changes in Health.
Who is the investor? -Often the bank that you pay your mortgage to is only servicing the loan. The owner of the loan may not be the direct negotiator.
Who is the Realtor? -Experience counts when doing a short sale. Short sales require diligence, perseverance, commitment, and know how. If you hire the right short sale Realtor, your short sale will likely take less time.
Having a property that is rented does not disqualify you from doing a short sale. It does however bring up some complications (of course all short sales have complications).
If you have a great relationship with your tenants, it is more likely that they will cooperate. Your tenants interests are not the same as yours. From their perspective, they would not want you to sell the home because that would mean a new landlord. From a buyer’s point of view, unless if they are an investor, a tenant occupied property would not be ideal.
With all of that being said, it is feasible to short sale a rented property. When we advise on this situation, our first advice is to see how long your lease is. If it is not going to expire soon, we advise that you speak with the tenants to see if they would be willing to break the lease early – often they will.
Also understand that tax implications are different for an investment than a primary residence. These differences should be considered.
If you are in this situation, you may have options. Speak with a short sale professional to see what your choices may be.
Yesterday I received this email from our short sale client that we are working with Saxon Mortgage. At least our client has a good sense of humor about this ridiculous situation. The horrible thing is that this is to common of a situation with all lenders (not just Saxon). Here is the email:
I just got another letter from Saxon saying they “ are reviewing your request but have not received all the documentation required” and if they don’t receive the docs in 10 days they will consider the request withdrawn. I think we’ve all put in too much time to have Saxon slip through some imaginary hole.
[Begin Fantasy Dream Sequence]
Why can’t I just send them a certified letter saying if they don’t send me the ruby slippers and the broom of the witch in 10 days the entire loan will be considered forgiven free and clear?
[End Dream Sequence]
Of course this email was sent to us after we have verified 6 times that they have received our complete short sale package. We shall continue to be diligent in negotiating with the Wicked Witch of the East. Perhaps we shall soon see the Wizard behind the curtain
d behind the curtain 
