You may have already heard about short sales, and how some homeowners resort to listing their homes as a short sale as a way to avoid foreclosure. But there are also different types of short sales that you may want to familiarize yourself with, which can be helpful to learn about, whether you’re thinking about purchasing a short sale or listing your current home as a short sale. Some of the different types of short sales include:
Traditional short sale
Most of the time when you see a home listed as a short sale, it’s listed as a traditional short sale. Even though a seller might qualify for a different type of short sale that has more favorable terms, they may opt for a traditional short sale if they’re in a time crunch. Because other short sale programs can have lengthy delays, a traditional short sale is a good option for those who need the process to be finished as quickly as possible. If you want to list your home as a traditional short sale, you’ll usually need to provide your lender with documentation explaining monetary hardship, in addition to tax and financial documents. However, the procedure is usually very easy overall.
HAFA short sales
In 2009, the Treasury Department announced the HAFA short sale program as a practical option for those who can’t afford their mortgage payments through the current Home Affordable Modification Program (HAMP). The HAFA short sale program offers incentives to loan servicers for allowing consumers to choose a deed-in-lieu of foreclosure (DIL), or a short sale used to avoid foreclosure on a home loan that is eligible for modification through the HAMP program. Those participating in HAMP are required to comply with HAFA terms.
VA short sales
Those who qualify may want to choose a VA short sale (supported by the Department of Veterans Affairs) if they’re unable to sell their home for an amount that is equal to or greater than what they have remaining on their home loan. With a VA short sale, the Department of Veterans Affairs would pay out a “compromise claim” for the remainder to help borrowers with finalizing their home sale. Not all lenders will accept short sales with a compromise claim; contact your lender for details.
FHA short sales
If you have an FHA mortgage loan and you’re unable to keep up with monthly mortgage loan payments, you may have another option aside from foreclosure or traditional short sale. The Federal Housing Administration also offers FHA short sale options for FHA mortgage loan holders.
Do you need cash to buy a home or to catch up on current mortgage loan payments? Whatever your needs may be, Peachtree Financial Solutions wants to help. If you’re receiving periodic payments from a long-term payment stream, such as an annuity or structured settlement, you may be able to receive your money sooner. Contact Peachtree Financial Solutions today to learn more about selling some or all of your future payments for a lump sum of cash.
Nothing above is meant to provide financial, tax, or legal advice. You should meet with appropriate professionals for such services.