Both Tom and Gayle DeWitt are your local Certified Foreclosure and Shortsale Resources (SFR). This certification is through the National Association of Realtors.

What is a short sale? A short sale is a transaction in which the lender, or lenders, agree to accept less than the mortgage amount owed by the current homeowner. In some cases, the difference is forgiven by the lender, and in others the homeowner must make arrangements with the lender to settle the remainder of the debt. Why is the number of short sales rising? Due to the recent economic crisis, including rising unemployment, and drops in home prices in communities across the nation, the number of short sales is increasing. Since a short sale generally costs the lender less than a foreclosure, it can be a viable way for a lender to minimize its losses. A short sale can also be the best option for a homeowners who are “upside down” on mortgages because a short sale may not hurt their credit history as much as a foreclosure. As a result, homeowners may qualify for another mortgage sooner once they get back on their feet financially.

The U.S. government has expanded the Home Affordable Modification Program (HAMP) to include incentives for servicers offering options to eligible homeowners in default wishing to avoid foreclosure. The new program is called Home Affordable Foreclosure Alternatives (HAFA). The HAFA program began on April 5, 2010.

For troubled homeowners across the country, the Obama administration announced new provisions to the Making Home Affordable program.

Read frequently asked quesitons about the Federal Mortgage Forgiveness Debt Relief Act.