It is already nearly July of 2010! If one is thinking of doing a short sale on their property, now is the time to get off the fence and do it. The forgiveness laws in regards to the balance difference are only good for 2010.
After that, one may be subject to paying taxes (state and federal) on the balance difference and or the lender may come back to you for the balance. Both situations are not good for the current mortgage holder. In a May 2010 article by ShortSaleDailyNews, they state;
'Nearly 8% of all mortgage holders in the U.S. are at a serious risk of losing their homes and 14% are at some stage of delinquency, according to the Mortgage Bankers Association. That means that nearly 4.3 million homeowners may need to short sale. These homeowners are either in foreclosure or are at least 3 payments behind.'
This is serious information not to be ignored. The article goes on to say; 'According to the same report, more than 10 percent of mortgage holders missed a payment in the first quarter of the year. Last year, the same time period, was only 9.1 percent. This year's number is a record high. The percentage increase could be due to seasonal issues. An indisputably positive trend has been a drop in the number of new defaults from 3.8 to 3.5 percent. The housing market is not going to be on the mend for a while despite a few positive indicators. REO shadow inventory, and the potential of millions of homes not curing their default or finding a positive workout solution means distressed property prices will stay with us for a long time. Distressed properties flushing the market, mean lower values across the board.'
Sooner or later, the banks will have to deal with their inventories. We can?t wait until the job market corrects itself. The economy is going to take awhile to stabilize and turn around. Can we get real for a minute? How many of you are making the same monthly salary you did in 2003? How many of you lost your job between 2003 and 2009? And lastly, how many of you have regained employment, only to make half of what your monthly income was in 2003? The reality is there are still a lot of people who need to do something in regards to their situations. According to the May 2010 article by ShortSaleDailyNews; ?Government?s prevention programs have been largely ineffective. According to recent reports, only 25% or approximately 1.2 million homeowners who started one of the Making Home Affordable programs last year have received a permanent modification. Of those that enrolled, there is a trial phase drop-out rate of 23%.? The shadow inventory that no one wants to talk about continues to grow, and something has to be done with it. The question is when and how?