Daily Real Estate News, January 5, 2011
Sellers aren’t entitled to a short sale just because they’ve lost equity in their home. Lenders look for other hardships when approving short sale transactions. Lisa Udy, a real estate professional with Logan Real Estate in Utah, notes in a recent article the following hardships often qualify:
Job loss
Illness
Divorce
Death of spouse
Natural disasters
Bankruptcy
However, besides a hardship, lenders also consider whether the home’s value has dropped, the mortgage is near or in default (you don’t have to default to qualify but you must prove that if something isn’t done soon, you will default, Udy notes), and the seller has no other assets.
What doesn’t qualify as a hardship? Udy says:
Bad purchase decision or over-bought on the home
Unhappy with location
Purchased another home
Pregnancy
Walk away
Home value declined
Source: “Short Sale Hardships -- Qualifying for a Short Sale,” Tempe Real Estate Agent (Jan. 4, 2011)
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