If you’re in danger of foreclosure, one possible remedy is a short sale, where the mortgage lender agrees to accept less than is owed. These are complex transactions, but new measures that go into effect next April might make them easier. Meanwhile it remains a slow process, and lenders prefer loan modifications to short sales. [Link]
The new guidelines “focus on a range of elements in the short sale process. They suggest,
for instance, that lenders offer second-lien holders up to $3,000 of
the short sale proceeds, with Treasury reimbursing lenders up to $1,000
for doing so.”
Under the guidelines, homeowners who are considering a short sale
are encouraged to speak with their lenders early in the process about
an acceptable sales price for the house, rather than simply contacting
a lender when a buyer has made an offer.
And owners who complete a short sale will receive $1,500 from the federal government for relocation costs.