New “Short Sale” Process Helps Families Facing Foreclosure r } (NAPSA)—Getting out of debt without destroying their credit may be easier for many Americans thanks to new federal guidelines. They’re designed to deal with the problem of millions of home- owners who have been forced into foreclosure by the recent recession and plummeting home values. Rather than walking away empty-handed when their home is worth less than the mortgage owed, homeowners now have financial incentives to work with the lenderto sell their home through a process called a Short Sale. WhatIs a Short Sale? They’re called Short Sales because the homeowner’s mortgage lender agrees to sell the homefor less than the balance due on the mortgage. The process is not new but the U.S. Treasury Department’s recently announced Home Affordable Foreclosure Alternatives (HAFA) program simplifies it and makes it more attractive to both homeowners and lenders. A Short Sale generally costs the lender less than a foreclosure. Short Sales are also a better alternative than a foreclosure for homeowners because their credit score isn’t as negatively affected and, in most cases, they are freed of the mortgage debt. “A foreclosure creates devastating damage to your personal credit report,” says Margaret Kelly, CEO of RE/MAX Interna- tional, a U.S.-based network of nearly 100,000 real estate agents. Manyof her company’s real estate agents get special training in helping homeowners whose homes are worth less than their mortgages. A number of homeowners have discovered a way to get out from under an underwater mortgagewith their credit pretty much intact. “Foreclosure credit damage can follow you for 10 years, but with a Short Sale, a homeowner could qualify for a new mortgage in as little as three years,” Kelly adds. New Guidelines HAFA provides financial incentives and simplifies procedures that previously made a Short Sale a long and frustrating process. Here are some of the new guidelines: Lenders must respond to Short Sale requests within 10 business days of receipt of the offer package. The seller will be released from all liability for repayment of the primary mortgage debt. Subsequently, the seller is entitled to a relocation incentive of $1,500, which will be deducted from the gross sale proceeds at closing. * Thelenderwill be paid $1,000 to cover administrative and processing costs for a Short Sale or a deed-in-lieu of foreclosure. The property must be listed with a licensed real estate professional who conducts regular busi- ness in the community where the propertyis located. How to Get Help The key to successfully negotiating a Short Sale with a lender is to use an experienced real estate agent who specializes in handling distressed properties. The RE/MAX network accounts for nearly 60 percent of all Certified Distressed Property Expert designees—oneof the leading distressed property training programsin the industry. If you think a Short Sale may be right for you, you can use the “Find an Agent” feature on www.remax.com. Look for the fol- lowing designations: Certified Distressed Property Expert (CDPE), Five Star Professional (FSP), Short Sales and Foreclosure Resource (SFR), or Short Sales Foreclosure & REO (SSFR). You can also search under “Specialties” for Short Sale or foreclosure property experts. Learn More For more Short Sale information and videos, visit www. remax.com orcall 1-800-525-7452.
