For struggling homeowners, there is no solution more promising and less damaging than a short sale. A short sale typically applies to homeowners whose properties are valued less than the remaining balance on their mortgages, making it nearly impossible for them to sell without a significant and often crippling financial loss.
As an alternative to foreclosure, lenders can agree to allow a seller to short sell the property at a lower value, oftentimes with no liability for the remaining balance of the mortgage.
For homeowners with mortgages held by Fannie Mae, the short sale solution has been a bit harder to reach in recent months. Essentially, Fannie Mae is authorizing short sales, but reportedly at prices higher than the market and buyer demand can support. Because the prices are not favorable to prospective buyers, Fannie Mae short sales have slowed down. When short sales don't close, foreclosure is all but a certainty.
Sadly, the overvaluation of Fannie Mae properties has stifled short sales. Agents and their clients have become discouraged, and it's time to reach a solution that reduces foreclosures and gives qualified buyers the opportunity to purchase appropriately priced homes.
RE/MAX is pleased to see that the National Association of Realtors has taken steps to engage in conversations with Fannie Mae and the Federal Housing and Finance Agency, and to encourage a remedy to the logjam in Fannie Mae short sales. And we're even more pleased that Fannie Mae appears to be addressing the issue.
The best news: Fannie Mae announced a new program, HomePath for Short Sales Escalation Process, to keep short sales on track. Read more about this great start.
If you're a homeowner who's struggling to pay your mortgage, find a RE/MAX agent who can help you explore all your options.