What it will do:

• The government will give $3000 toward moving expenses to the sellers in the short sale deal or to those who agree to a deed in lieu of foreclosure. This will certainly assist the distressed homeowners who don’t quite qualify for the mortgage modification program.
• Mortgage companies will have to pre-determine the minimum bid prior to the listing of the home. If the offer is greater, it must be accepted by the lender. This is expected to accelerate the process dramatically.

Overall, these measures should make more short sales (which typically yield a higher sale price than foreclosures) possible.

Qualification Restrictions:

• The home needs to be a borrower’s primary residence.
• The homeowner has to be either: behind on his or her mortgage or on the verge of becoming delinquent.
• The program is currently not available for mortgages owned or guaranteed by either Fannie Mae or Freddie Mac.

So we’ll keep you posted on the latest as we get confirmation on additional changes. It looks like we may be moving in the right direction here; call us if you have any questions.

These shadow inventory properties are currently in foreclosure or are headed that way and are just not yet on the market. So while the government’s efforts to decrease foreclosures have backfired, the foreclosure purchase opportunities will be rampant for investors.

The National Association of Realtors has reported that there are currently 3.6 million homes that are unsold; we are now looking at twice the current inventory that will be available to investors and even to homebuyers looking for foreclosure opportunities.

In addition, since the governmental modification programs and refinance programs didn’t avail themselves to homeowners who were either too wealthy or owned too much on their homes; a very large percentage of the shadow inventory homes are luxury class. Many of these homeowners have given up and have vacated their homes.

These are the hot real estate investment opportunities: the chance to buy a high-end investment property by offering a home owner a short sale proposal. And while we need to reiterate that short sales have to be processed through experienced short sales Realtors, these are the veritable spoils of war that make for brilliant real estate investments.

The best way to avoid foreclosure is to pursue alternatives like a short sale or a loan modification. Don’t run from the obligation, but instead confront it head on with an experienced Realtor and your lender to determine the best approach.

Besides the obvious impact to the homeowner of losing the home itself, a post-foreclosure credit score will take a hit of at least 200 points and the homeowner’s credit history will reflect the foreclosure for seven years.

But the ripple effects continue. Both the neighborhood of the foreclosed home and the surrounding community are adversely impacted. Along with the equity, the value of those area homes declines and the likelihood of theft and vandalism increases.

Obviously there is lot at stake. A targeted approach with your lender, a licensed Realtor, and possibly a legal resource will potentially help your situation, maintain the integrity of your neighborhood, and eventually restore some balance to this market.