Foreclosure is something that most people want to avoid at all costs. Nobody sets out to own a home and then see it taken back by the lender. Across the country this has become a common theme as tens of thousands of people are losing their homes due to an economy that has not been this poor since the great depression. Like other states, Pennsylvania has its fair share of foreclosures.
In these tough economic times there are many contributing factors on why someone could fall victim to the inability to pay a mortgage. These include but are not limited to job loss, reduction in income, mounting credit card debt, an increase in mortgage payments, an illness, or a divorce.
There are areas where property values have dropped since the real estate market peaked in 2005. Some home owners have found themselves so under water that they just throw in the towel and walk away from the property lock stock and barrel.
In fact there are a percentage of borrowers that still have the ability to pay their mortgage yet decide they just do not want to own the home anymore. When a Massachusetts home owner can afford to pay their mortgage yet feels the need to abandon the home it is what’s known as a strategic foreclosure or default. Fannie Mae the giant mortgage backer for many loans has taken the initiative to come down hard on these folks walking away by not allowing them to procure financing for up to seven years!
People that decide to strategically default generally are looking at it as a business decision. The theory is that it will take years for their homes market value to recover to anywhere near where they paid. Instead they walk away from the property and start fresh.
What I have realized in talking to many people who have come under financial strain is that they don’t realize they have options besides letting the lender foreclose.
The alternative that I have been tremendously successful with is helping owners complete a short sale of their property. In a short sale the lender allows a home owner who owes more than their home is worth to take less than the amount owed at closing.
You may be thinking why would a lender want to allow a short sale? There are a number of reasons, most importantly the cost involved for the lender proceeding with a foreclosure. The mortgage holder when all is said and done can easily spend $40,000-$50,000 going through a foreclosure. A short sale can save the lender money they would otherwise lose. With a short sale there is a buyer in place and on many occasions the owner is still in the home maintaining the property until closing.
The CDPE designation (Certified Distressed Property Expert) is designed to educate Realtors about foreclosure and short sale processes and to provide agents with the necessary information to save homeowners from foreclosure through the short sale process saving the homeowner’s credit rating and giving their life and dignity back to them making them eligible to purchase another property when they are through whatever reversal of fortune that caused them the ownership hardship. Phil Rutt of the MarianRutt.com Team has taken the short sale training and is helping homeowners in Lancaster County PA to go through the short sale process. Marian Rutt of the team says, “It is definitely worth it for any homeowner considering foreclosure to contact Phil to help them through the process.”
Some information excerpted from an article written by Blogger Bill Gassert a RE/MAX agent