The two short sale approval letters are for a family which had both a first mortgage loan and an equity loan from Bank of America, B of A. These homeowners owed almost $700,000 on their home because they bought at the peak of the market and was underwater by approximately $350,000 due to a decline in the real estate market.
The homeowners also borrowed $77,000 on their equity line to pay for medical bills and living expenses while the mother worked less hours so she could care for their baby with medical problems.
The homeowners had been unable to pay their mortgage for over two years because of debt. The family had difficulty in paying their mortgage because of ongoing and building debts related to the baby’s medical condition and had applied and was accepted for a “Department of Justice Loan Modification” under the Homes Affordable Program. They had not been able to pay their mortgage for over two years and called me for help because they were 30 days away from a foreclosure trust deed sale and needed help in stopping the foreclosure and being allowed to remain in their home for a few more months until they had money to move and time to find a new place to live.
I helped stop the foreclosure sale and also helped the owners receive an offer of a loan modification The owners had previously applied for a loan modifications but had been rejected. I spoke with an official from the Homes Affordable Program and they applied and was accepted for a “Department of Justice Loan Modification” under the Homes Affordable Program. The owners decided to reject the loan modification but accepted a HAFA short sale instead.
The homeowner’s rejected the loan modification because it did not reduce their monthly payments to an amount that was acceptable and workable for them. They also did not accept the loan modification because the balance of their mortgage debt would increase over time rather than decrease since the monthly mortgage reduction would be “piggybacked” onto their new loan amount. The owners accepted a HAFA short sale on both their first and second loans.
The owners were able to remain in their home for approximately six more months until the short sale was completed and had time to find a place to live. The holder of their first mortgage lien forgave their entire debt of over $700,000 even though the house sold for only $351,000. The holder of the first also paid $8,500 to the holder of the second equity line so that the second equity debt of $77,000 would be completely forgiven. The owners of the home also received a $3,500 moving incentive from the bank to cover their moving costs.
If a short sale is caused by medical bill debt often times the owners can purchase a home in 18 months The average short sale seller is qualified to purchase a new home in approximately 2-3 years, however in cases where the debts are caused by documented medical bills often times the owners are allowed to purchase their next home in as little as 18 months. If you would like information about a Homes Affordable short sale, HAFA or a Homes affordable loan modification please contact me for a private consultation.