Society Journal

Recently, President Obama announced several incentives to encourage short sales which would help lessen the foreclosure crisis under the new Foreclosure Alternative Program. This program will give borrowers, who qualify, up to $1,500 to help with their relocation expenses in addition to almost $1,000 to junior lien holders to release their liens on the property. These incentives are meant to help stimulate the economy with new borrowers and are in effect until 2012.

A Tampa short sale is a transaction in which the seller’s financial institution or bank agrees to accept a payoff for a piece of property that is less than the balance due on the loan.  A smaller loss than a foreclosure would be an advantage to the lending institution and for the homeowner, the advantage is avoiding foreclosure.

When the amount of a home loan exceeds the current market value of the property, there are a number of options homeowners who are struggling with their mortgage payments might consider: loan modification, deed in lieu of foreclosure, bankruptcy, foreclosure or short sale.  With a short sale, a homeowner should consult with tax and legal advisers.

A short sale Tampa, Florida company says that the complexity of President Obama’s plan has made for a slow start and foreclosures are still on the rise.  As of April of 2009, the government’s plan helped a little more than 55,000 homeowners with loan modifications but estimated helping 9 million homeowners before the plan runs out.

Many banks have set up loss mitigation departments to handle the short sale of a home the financial institution owns.  It is ultimately up to the financial institution to make the decision whether or not to accept the lower payout amount.  Unfortunately, this process takes several months and there is no guarantee the financial institution will accept a contract offered by a buyer to purchase a person’s home to avoid foreclosure with a short sale, even with the government’s incentives.

Some people have felt shut out by the Obama plan. A homeowner with a 7% conventional loan does not qualify for a loan modification yet still finds it difficult to make the monthly payments in today’s economy.