When local community members come to our office seeking help with their housing situation, there are sometimes various options on the table. The River Forest and Oak Park foreclosure attorneys at our firm know that no two situations or goals are identical, and so a personalized approach is necessary when making an overall plan of action to deal with homeowner issues.
Of course one approach is to challenge the conduct of the banks that are seeking to foreclose on the home. The law has very specific rules about what these institutions have to do to properly foreclose--if they do not act appropriately, they may not be able to take the home.
However, at times there may be other ways that a homeowner can handle the situation. In some cases it may be prudent to try to sell the home and move on--this may be particularly attractive when the home is deeply underwater (more is owed on it than it is worth). A short sale may be worthwhile.
Short sales are notorious for the frustration they often breed--it may take months to get approval from all necessary parties in order to proceed. Fortunately, our Oak Park short sale lawyers know that many changes have been underway the past few months in an effort to better facilitate short sales. Many homeowners can take advantage of these opportunities to not only get out from an underwater home, but even receive relocation assistance.
For example, the Wall Street Journal reported last week on new rule changes to help make short sales more efficient and realistic for a growing body of homeowners. The new rules were announced by the Federal Housing Finance Agency and will apply to all homes backed by federal mortgage giants Fannie Mae and Freddie Mac.
One change involves opening up short sales to those who have yet to miss a mortgage payment. Some homeowners have been saddled by an underwater home, seemingly spending money for property that is worth far less than what it owed. Yet, banks were often loath to accept a short sale when the borrower was current on monthly payments. According to the new rules, which take effect at the beginning of November, even borrowers who are current may be able to take advantage of these opportunities.
In addition, the new rules place a cap on the amount of money that a second mortgage holders receive in the deal. All lenders must approve a short sale before it goes through. This presents a challenge when a home has multiple mortgages, because more than one lender must approve the sale. Second mortgage holders often balk at these sales, trying to stall the process in order to get a larger share of the sale price. The new rules seek to end the opportunity for those stall-tactics by placing a $6,000 cap on the amount they can receive. The goal is for this to speed up the sale, and make it more feasible.
Other parts of the new rules seek to streamline the process--requiring fewer documents to be submitted before approval. Also, those homeowners with various financial hardships--lost job, divorce, or death--may have an even speedier process to complete the sale and move on with their lives.
It will be interesting to see how effective these new rules are at helping homeowners get out from tough situations with a short sale. In our area it remains crucial for residents to remember that they do not have to go it alone. Take a moment to call our Oak Park foreclosure attorneys to share your story and see how we can help.
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