During January 2006, Hampton Roads foreclosure filings were 1 in 13,000. In December 2008, Hampton Roads foreclosure filings were 1 in 513 homes. As of this writing, foreclosures and short sales make up 30% of the real estate sales in Hampton Roads. During 2009, the number of short sales has increased fairly dramatically in the Hampton Roads area.
Definition A "short sale" is defined as a transaction in which the amount of the sale of the property is less than the total monies due the parties involved. This amount includes, but is not limited to; all back payments, balance of mortagage(s), interest charges, taxes, repairs, liens, real estate commissions, and attorney fees. The sellers can be current with payments, in collection, or foreclosure proceedings could have been initiated.
Why? The reasons are many and varied this happens. A lot of people in this circumstance are there because one or both of the wage earners lose thier jobs or income is reduced in some other way. Sub-prime mortgage rates are resetting. Property values decline and the borrowers wonder "why should I pay for something worth much less than I owe?" Almost 20% of the homeowners in this market owe much more than thier home is worth.
Help is Coming! Congress has introduced a homeowner saving package for all consumers that have loans with FNMA and Freddie Mac. In order to qualify for this assistance, there are some basic criteria .
- Primary residence only.
- Have at least 10% equity.
- Have source of income in order to pay.
- FNMA and Freddie Mac are offering to reduce payments down to 38% of household income. There is also the opportunity for reduction to 31%.
- Currently 90 days behind on payments.
- Congress is strongly suggesting that other servicers provide the same opportunities.
What is the 75 billion dollar foreclosure avoidance plan?
- There is currently a moratorium to all lenders requesting they cease foreclosures until further notice.
- The bill hopes to help 9 million people in 2008 and beyond.
- There are incentives for Servicers of loans to keep customers current.
- Provides bankruptcy judges the ability to reset mortgage rates and terms for those that qualify.
- Gives refinance capability even if you owe more than the value of your home. Up to 105% of the current value.
- Provides subsidies to reduce interest rates.
It's important to address the problem and not "walk away" from the house and damage your credit as soon as possible. If you contact me early enough before the foreclosure letter is received, I have time to speak to the lender and a chance to sell the home before it does go into foreclosure. If you are behind in your payments or just worried about what to do next, please let me have a chance to talk to you and explain your options. The difference between the selling price and amount owed could even be forgiven by the lender. Every situation is different.
If you would like to set up an appointment or just have some questions, please give me a call or contact me by email.
Preston Mangum; GRI, e-PRO, Realtor