Most common short sales in Massachusetts

Most common short sales in Massachusetts

The four most popular types of programs that you may run into when negotiating a short sale are Freddie Mac/ Fannie Mae, HUD/FHA Pre-foreclosure sales and of course your Non-GSE loan.  I’m not going to spend spend a lot of time on Non-Government Sponsored Enterprise loans. Realistically you have to call the servicer to find out if they have any requirements you need to adhere to when setting up your listing.

 Freddie Mac, Fannie Mae, and HUDS PFS program have a nice perk in that they will offer your seller $3,000 in moving expenses if they qualify. They need to be still living in the home and you start negotiating your short sale and for HUD not have any other secondary liens attached to title, otherwise HUD will take money from the 3K to payoff additional debt.

If you think about a short sale, what is happening?  The bank is getting shorted. Let’s say there is a $300,000 mortgage a homeowner may owe.  A buyer comes in to offer $275,000 on the property.  You have to account for your fees like commissions, traditional settlement cost, transfer taxes, so what the servicer has leftover maybe $265,000 or $250,000. The lender is taking a big short on the loan, and that’s where a short sale gets its name.  You have to consider the bank taking a loss.  Many times that is why sellers cannot receive funds at closing.  They possibly haven’t paid their mortgage in some time. 

This is the great thing about the Freddie Mac / Fannie Mae / and HUD’s PFS program.  They will give a homeowner what’s called a borrower relocation or moving incentive at closing.

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