A Compelling Case for a Short Sale

Foreclosures in Illinois remain high. According to Corelogic, Illinois is in the top five states for Feb., 2012, foreclosures filings. More than 10 million residential properties with a mortgage are upside down. Negative equity combined with high unemployment is driving the foreclosure market. REO inventory continues to grow at a disturbing rate. And while loss of equity isn’t a financial hardship, when you couple it with high unemployment rates and an increasing cost of living you have a compelling case for a short sale approval.

In 2009 The Obama Administration introduced the Making Homes Affordable (MHA) program, established to help struggling homeowners. In 2010 the Home Affordable Foreclosure Alternative (HAFA) was implemented for non-Fannie Mae and Freddie Mac loans. Now, on June 1, 2012, HAFA will implement changes beneficial to homeowners -- especially investors in 1-4 unit residential properties.

Here's a summary of the changes: 

	NEW	OLD until 06/01/2012
Deadline	December 31, 2013	December 31, 2012
Relocation Assistance	$3,000 to homeowner or tenant occupied properties	$3,000 to homeowner
Occupancy Requirement	NO OWNER OCCUPANCY Requirement	Owner Occupied or Job Transfer Exemption
DTI: Debt to Income Ratio	PITI may exceed 31% of gross income at borrowers request	PITI may not exceed 31%
Secondary Lienholders	May receive up to $8,500	May receive up to $6,000
Credit Reporting Guidelines	Account Status=13(Paid or closed account/zero balance) or 65(account paid in full a foreclosure was started)	Mortgage was settled  for less than the full amount
Other Real Estate Purchases	None previous 12 months	None past 90 days for Job transfer

The Chicago Association of REALTORS® has several programs to help you use HAFA to grow your business. Join us to learn the basics at the afternoon session of Member Outreach on April 10. Or, enroll in an education course including the Accredited Distressed Property Representative (ADPR) Certification Program, Home Affordable Foreclosure Alternative (HAFA),  Broker Price Opinion Resource (BPOR) and the Short Sale and Foreclosure Resource (SFR). All of these address current changes in foreclosures and short sales.

 Marki Lemons, ABR, ABRM, ADPR, CRB, CRS, Green, e-PRO, CNE, CDEI, e-certified