Government Program Aims to Help Homeowners Avoid Foreclosure

Government Program Aims to Help Homeowners Avoid Foreclosure

Homeowners across the United States who are undergoing financial hardship could avoid foreclosure under a U.S. Treasury Department program. Under the program, which went into effect in April 2010, at-risk homeowners could be free of mortgage debt without going through foreclosure, and given $3,000 for relocation.

The Treasury program provides incentives for lenders and homeowners to complete Short Sales – transactions in which the lender agrees to a sale price that’s less than the borrower owes on the mortgage. Short Sales are preferred to foreclosure because homeowners may take less of a hit on their credit and lenders realize a smaller loss.

However, Short Sales often get bogged down because of the complicated nature of the transaction. Deals can fall through because the process takes too long.

Under the program, which speeds up and simplifies the Short Sale process, mortgage servicers have 10 days to approve or reject a request for a Short Sale. And when the sale is done, the borrower must be fully released from the debt of the primary mortgage.

Read more details of the Treasury program.

Fannie Mae and Freddie Mac have their own Short Sale guidelines, which are similar to the Treasury program, but different in some respects.

Read more about the Fannie Mae and Freddie Mac programs.

If you’ve fallen behind on your mortgage payments or received a pre-foreclosure letter from your lender, a RE/MAX real estate agent can help.

RE/MAX has more than 15,000 real estate agents specially trained in helping homeowners avoid foreclosure. Find a real estate agent in your area (in the Designations search area, select Certified Distressed Property Expert, Five Star Professional or Short Sales and Foreclosure Resource).

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