WHY Are YOUR Stories So Important?
It started with “hardship” and “delinquent mortgage credit”.
All of us would not be surprised to hear the words “delinquent mortgage credit” and “foreclosure” in the same sentence. Ultimately the homeowner did not pay and the bank took back the property.
But a short sale, the sale of a home where the loan amount is greater than the sales price the home can be sold for, continues to be a mystery. A short list of defined hardship reasons and two questions to consider always exist:
- if the mortgage delinquency is believed to be “strategic”, where the ability to make the payment is present but the homeowner purposely defaults anyway
- or the mortgage delinquency exists due to a real hardship
Because of this, confusion continues on if there really is a hardship or if underwater homeowners go delinquent in order to get a short sale approved.
Little has been reported about the lender policy of required mortgage delinquency in order to get a short sale approval.
In the past, those in underwater homes who have had to short sell were most often told by lender representatives that they could not get help with a short sale unless the mortgage was delinquent. Many homeowners questioned this practice, bewildered that credit had to be good to get the mortgage in the first place, but required to be delinquent by the same lender in order to get short sale help to exit the home. Many homeowners tried to stay current through the short sale process but ultimately received a denial from unnamed “investors”, even though published conventional guidelines provided reasons where homeowners could stay current during a short sale.
Almost all who tried to stay current through the short sale process ended up going delinquent on their mortgage in order to get the short sale approved. Unknown to millions of short sellers, mortgage delinquency that went past 120 days late was coded as a foreclosure.
Many of those affected had no idea that this happened until they were denied for a new mortgage years later after a foreclosure credit code showed up on their short sale credit.
To this day, conversation surrounding short sellers includes this: “Yes, there were many folks who were “underwater” on their homes. Sure, there were some that really had a hardship, but there were many who also scammed the system and strategically defaulted. I know because I have seen then.”
A major reason for this website is to teach affected borrowers and loan originators how to prove their story that needs to be communicated to lenders for a new mortgage after a short sale or a foreclosure.
- Explaining acceptable “Extenuating Circumstances” for a short sale makes the difference between waiting 2 years rather than 4 years on a conventional Fannie Mae or Freddie Mac mortgage.
- Explaining an “economic event” that resulted in a 20% reduction of income sustained for 6 months or more makes the difference between waiting 1 year rather than 3 years after a short sale, foreclosure or bankruptcy for an FHA mortgage.
- There is a difference between:
- acceptable reasons for a hardship to short sale a home
- acceptable “extenuating circumstances” and “economic events” that must be explained in order to get a new mortgage.
- It has been proven that strategic defaults are the minority.
- The voice of your stories has a strong impact on those who are finally listening.
- Those affected and loan originators: getting a new mortgage for affected consumers is not an easy task.
- It can be done and is being done now.
George Albright’s Story
George Albright is a professional videographer who had a short sale but was able to get a new mortgage almost 3 years later. George was one of millions unaware that the foreclosure code was applied to his short sale credit and this initially resulted in a mortgage denial. After he closed on his home, George made a video that clearly explained his problem with the erroneous foreclosure code on a short sale, and how it was finally fixed. His video did more to put a real face on hardship and complications surrounding short sales than anything previously done.
George Albright Video: “Past Short Sellers Can be Homeowners Again!”
Because of the effect of his video, it was realized that your real stories matter! Many of the 1 page hardship letters that lenders required for short sale approval do not tell the whole story. In fact most of the letters reviewed gloss over hardship, with more stated to plea for the short sale.
The Straw the Broke the Camel’s Back
But as we hear more voices, the vast majority of you tell stories of trying to keep homes or rent them out, only to finally be financially wiped out. You speak of layoffs and income reductions, divorce, death, and simply needing to downsize to stay in a home, or to upsize to accommodate your growing family. Many of you tried to work through these financial setbacks for years, dipping into retirement accounts trying to stay afloat, only to have to short sale when resources were gone. In every one of your stories, there is a “straw that broke the camel’s back,” and that is the point where it was determined there was no other choice but to short sale your home.
It is clear that many of you are having problems coming back into the housing market even though mortgage guidelines define when you are eligible to re-enter again. Your stories of what REALLY happened, and an understanding of how you did everything possible to stay in your home needs to be explained.
Those who are listening now, including the underwriters at lenders that you are trying to get a new mortgage with, need to know these details. They need to know that you did everything possible to avoid short selling – and they need to be assured that you will not short sale a home again.
7.1 Million U.S. (Distressed) Homeowners STILL Underwater in June 2015
The great majority of you tried to do the right thing while your home was “underwater” with negative equity, and many are still trying. An estimated 7.1 million U.S. homeowners are still underwater on their homes. Many have conventional mortgages or 2nd mortgages where no refinance option exists!
7.3 Million Who had Past Short Sale or Foreclosure Eligible to Re-Enter Housing Over Next 8 Years
This is a HUGE market! We in the mortgage and real estate industry will help you re-enter the housing market! Detailed information on how to do this will be provided throughout this website.
Pick your method of explaining your story and do it.
Whether video or a written story, please sign with your first name and the state you are in now, and also where the short sale occurred. Many of you have moved for jobs, and the Help Network map shows where we have committed partners who will do their best to provide assistance for past short sellers and those who had a past foreclosure, as well as currently underwater homeowners.
Email videos or letters to: firstname.lastname@example.org.
Primarily because of problems faced with the credit code on past short sale credit and the new mortgage denial that resulted, many who saw a need to help those going through this complex problem wanted to join forces and help. These sources include credit reporting agencies, lenders, realtors, loan officers, government agencies, public officials, PMI companies, HUD approved counseling agencies, and even past short sellers who want to help you.
These people resources are available for all to use and we need them in all states! Those who can help in each state will be promoted for FREE on the Help Network map.
Sincerely,Pam Marron/HousingCrisisStories.com Developer
Licensed Florida Mortgage Broker, NMLS#246438