Short sales, loan modifications and foreclosures

There have been many posts from clients and agents frustrated over the short sale and foreclosure process.  Since I'm in FL,  now called the foreclosure state rather than the sunshine state, I thought I'd give a few hints to those who want to know how to make it easier.

FIRST of all, it depends on whether you are the homeowner, or if the house is an investment.

If you live in the house, it' s your primary residence, then you have several choices.  The new O'bama Home affordability plan is meant to help you.  Go to http://www.homeaffordability.gov and take the test to see if you qualify for this plan.  Basically what it does is allow you to refinance your mortgage at todays rates even if your house has lost value due to the economy.  It does not allow for help with investors who don't live in the house.

Secondly, you need to know if your loan is owned byFannie Mae or Freddie Mac.  Although you may make your payments to Chase, Wells Fargo, etc. they are only loan servicers.  If you are going to try to do a short sale or a loan modification, you need to know this info. 

You can find it by looking up your settlement statement (called a HUD1) when you bought the house (it will be at the top.)  Or...you can have your favorite realtor call their favorite title company and find out.   OR  call the customer service number to whom you make your payments and ask.

You can also check here onlline to see if it's fannie mae:  http://loanlookup.fanniemae.com/loanlookup/
or go to http://www.FreddieMac.com to see if they own your loan.  These guys do NOT want to foreclose on you, pay an atty, HOA or condo dues, taxes, and wait for months to foreclose, they just want it DONE. Look around the site and see what your options are.  It will be based on your situration ie: are you behind due to medical problems, loss of your job, or many other reasons. they want you to fill out a hardship letter to explain the reason. 

If you decide to do a loan modification, your mtg co will tell you not to pay anyone to do it because you can do it yourself. This is true, but it is VERY time consuming and you may want to hire an attorney or a great agent to have them handle it for you.

If you do a short sale, you will need to list your house with a REALTOR and that REALTOR needs to be familiar with how short sales work!  Don't just list it with anyone, they have to know the system or you will get foreclosed on.

Last but not least, the mtg co will try to get you to do a 'Deed in Lieu' which means you basically hand over your house to them. DO NOT DO THIS!  It saves them money, but hurts your credit worse than a short sale. A foreclosure is the worst, but a short sale shows up as a sale, whereas a deed in lieu makes it look like you didn't care and just said "here - take it back!"  That shows worse on your credit report. 

If you have any questions regarding this blog, feel free to email me aat PaulaBean@HomeOrlando.com. Although I'm in Orlando,FL I can still help you with questions, or refer you to a great agent in your state that knows the loan mod/short sale/foreclosure process, or rrefer you to an attorney who does.  The only issue I have with attorneys is they work M-F, 9-5 with Wednesdays off for golf.  It takes them longer to help and all the while the clock is ticking and costing you more atty fees.  Realtors work 24/7/365 and can get it done quicker and the bank pays us anyway, not you. 

I hope this was helpful, and should anyone need to get additional info, please call or email me and I'll be happy to help.  We have to take our lives back!!