Not only are homeowners scrambling to figure out how to fix their financial position so is the Treasury and the FDIC. President Obama has announced a new program to help people in mortgage distress, it is called the “Foreclosure Alternative Program”. The entire details can be seen at the United States Treasury web site.
My summation of the program is that the President would like to see lenders attempt loan modifications and if that process fails to aid the homeowner short sell their home. To do this the lender or homeowner will select a local area short sale Realtor to assist in the process. It is my understanding some lenders will have preferred or approved Realtors who are experienced in the short sale process.
If this process “short sale process” fails the lender will take possession of the property under terms less forceful that a full foreclosure called a “deed in lieu”. In some case it even appears that the lender may provide funds to the homeowner to make arrangements to leave the property provided it is still in good condition.
This program on its face appears to be a good move in the right direction. It is relatively new and even some of the Real Estate community is not yet aware of it. Like all Government Programs it has the details to be worked out.
This will not change the advise that I give to my clients. That advise being consult with an attorney and a tax professional to see how a short sale could effect your own situation. This is the same advise the California Association of Realtors provides in their Short Sale form.
As a team we at shortsalenurse.com and Prudential California Realty work hard to stay on the cutting edge of how our San Diego County clients are effected by changes in the law. In the coming days as the Foreclosure Alternative Plan develops we will continue posting on this blog.