Is It Better To Short Sale Or Agree To HAMP?
Print View - Published: Sun, 16 Jan 2011 at 11:25 PM
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One of the primary things that anybody considering either a HAMP or short sale has to pay attention to is that there are particular conditions attached to qualify.
When looking into a short sale, the sellers must keep in mind that they would probably have their credit rating adversely affected. Those who are willing to go ahead with a short sale, and are doing so despite having the ability to meet their payments will probably find that they're answerable for the outstanding amount on the loan.
Some of the conditions that apply to qualifying for HAMP, or Home Affordable Modification Program, need that the seller has fallen under a hardship such as loss of income or unexpected increase in expenses. In fact, the HAMP program has assisted lesser homeowners than was expected due to several applicants failing to qualify for the program.
Another criticism of HAMP is that it doesn't appear to help those who conform to it as much as it was expected to. In fact, of all those who initially qualify for HAMP, 29% drop out of the program due to being unable to pay the new modified amount. It is thought that many of those who have lost an income still can't comfortably afford their loan repayments even after the modification.
One major issue which is likely to heavily influence a house owner's decision is that their house may no longer be worth the value of the loan. Moreover, if they've been struggling financially then the property may be in need of maintenance and repair, making the property less attractive to buyers.
Those who can afford the modified payment schedule, and are more conscious of their future, might prefer to opt for HAMP however since a sort sale will still go on record and have an negative effect on their credit rating. HAMP might also be more appealing to those who have families and have lived on the property for some time. Leaving a home is one matter, while leaving an actual family home is altogether another matter and several people would probably want to do all that they can not to lose their family house.
However, those who don't qualify for HAMP, might even find this to their advantage because under the HAFA, or Home Affordable Foreclosure Alternatives program, those who don't qualify for HAMP can get a short sale approved in 10 days and be given up to $3,000 upon sale of the property.
Many individuals are turning away from house ownership on account of the exposure to debt that it leaves them to, a short sale may be the more attractive choice as they look to cut their losses and run. In spite of running up a negative credit rating they may still be in a position to buy a home after two years, depending on their delinquencies.
If your loan is through a Fannie Mae or Freddie Mac lender, then they must take part in HAMP, provided that you meet all of the specified criteria.
About the Author
Are you willing to invest in realestate investing and confused where and how to get helpful information? Visit http://www.shortsaleology.com where in you can find all the details.
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