Starting TODAY, for the first time ever, borrowers, in Florida and across the U.S., who have never missed a mortgage payment will be able to short sell their houses if they can demonstrate a hardship, such as loss of employment or the death of a spouse.
This new rule will allow for underwater homeowners to get rid of their mortgage and also take advantage of the Mortgage Forgiveness Debt Relief Act of 2007, which is expected to expire at the end of the year.
Previously, only delinquent borrowers have been eligible for short sales.
There is a downside. The average person suffers a 150 point credit score loss after a short sale. This will be no different for non-delinquent homeowners because there is no special coding that differentiates them from those who went months without paying their mortgages.
The Federal Housing Finance Agency (FHFA) is currently in discussions with the credit industry to determine if and how this new law will affect credit scoring, but no solution has been found as of yet.
If you are considering a short sale, you should consult an attorney to discuss your options. There are many things changing in the housing market, and it is important to have all of the facts before making a decision.
Source: Inman News