Minnesota Short Sale Overview
Short sales in Minnesota are useful for homeowners who owe more on their home than it is currently worth. If you can no longer afford to make your mortgage payments and you have not qualified for alternatives that enable you to retain your home, selling your property with a short sale now may be your best choice to pay off the mortgage balance. Plus, you can control the timing and terms under which you move. A short sale can still be considered by most lenders even after the foreclosure sale- during redemption period in Minnesota.
What is a Short Sale in Minnesota?
A short sale: the lender agrees to accept an amount less than what is actually owed on the loan based on a showing of financial hardship. For example, if a homeowner has a defaulted mortgage loan with Wells Fargo in the amount of $200,000, but the property is only worth $140,000, Wells Fargo may allow the homeowner to sell their property to a qualified buyer for the current value of the property and, in some cases, forgive the amount on the unpaid balance. Mortgage Forgiveness Debt Relief Act may help homeowners who are caught in the housing crisis.
A successful short sale in Minnesota is subject to the lender’s approval so it can take months to be completed. In the meantime, your lender may have already initiated the foreclosure process. It is highly possible the short sale process works in parallel to foreclosure process in Minnesota. Therefore, it is vital that the homeowner act quickly and correctly.
Why Short Sale in Minnesota?
A Short sale should be considered:
* If home ownership is no longer affordable and you are interested in transitioning to a more affordable housing.
*If you are not eligible for a modification and you have been unable to resolve your difficulty through other programs.
*If you consider selling your home but it is currently worth less than the amount remaining on your loan.
A successful short sale in Minnesota has the following advantages:
Eliminate or reduce your mortgage debt. Assistance for relocation may be available. Avoid a damaging foreclosure entry on your credit report. Avoid possible deficiency judgment. Tax exemptions-consult a tax attorney for your specific situation. Recover your credit score to get another mortgage faster than if you went through foreclosure.What is Home Affordable Foreclosure Alternatives (HAFA) Short Sale Program?
HAFA short sale is under Home Affordable Foreclosure Alternatives (HAFA) Program. Qualified Minnesota homeowners can receive up to $3,000 for moving, rental, and other relocation expenses upon successful closing of the short sale. HAFA short sale also provides some funds to pay off junior loans. Homeowners will not owe any more for the property after leaving- will be free from the threat of foreclosure in Minnesota.
According to www.makinghomeaffordable.gov, in order to qualify for the HAFA short sale program, homeowners may have to meet all the following:
•You live in the home or have lived there in the last 12 months.
•You have a documented financial hardship.
•You have not purchased a new house within the last 12 months.
•Your first mortgage is less than $729,750.
•You obtained your mortgage on or before January 1, 2009.
•You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.
Compared to traditional Minnesota short sale process , HAFA short sale has the following advantages:
Faster decisions once an offer is submitted.
A pre-approved list price could be provided before listing the home. Deficiency after Minnesota foreclosure is waived. The mortgage debt will be settled through the program. No legal action can be taken on/against the outstanding mortgage debt. $3,000 will be provided for homeowners upon closing for relocation assistance. No cash contribution or promissory note required to release any lien. Minnesota foreclosure process postpone subject to specific conditions.
Your Next Step:
If you want to short sell your property or have any questions about short sales, please contact our Minnesota licensed short sale agent expert now. Our short sale specialist at ETC Realty will help you understand your options and answer your questions. There is No cost to you for our service. The sooner you call, the more we can help.
