Short Sale Protection for your San Antonio Military PCS Move
For military families who have received orders to PCS move to San Antonio, it is a common scenario to have the military spouse stay behind to try and sell the home.
Some of these homeowners will have mortgages which are now bigger than the current market value of their homes, especially in markets where home prices have dropped significantly. These are what we call the “underwater” homes. When this happens and they wish to sell their underwater home, one of their options is to do a short sale, or to sell the home for less than what they owe. The profits of the sale will go to the bank or lender, and the seller gets to walk away free from the loan.
But to qualify for a short sale, banks usually require the homeowner to be delinquent in their loan or have a hardship in order for the short sale to be approved. This could be a challenge to military members who want to do a short sale in the interest of time, but do not have a hardship and do not want to ruin their credit by being delinquent on their loan.
Fortunately, Freddie Mac and Fannie Mae have released new guidelines which will offer protection to military members and their families who want to short sell their home.
The new guidelines state that military homeowners who have PCS orders to move need not be delinquent on their loan for them to qualify for a short sale.
Let’s say a military member wants to sell their home, which has an appraised value less than what they still owe the bank in mortgage.In order for this service member to meet the requirements for hardship or delinquency, they will skip their mortgage payments even if they could still afford it just to sell their underwater home. the worst that could happen is once they have done this, the lender may still not approve the short sale and opt for a foreclosure, which has a more severe impact on their credit compared to a short sale.
But under the new guidelines set by the Federal Housing Finance Agency, military members who have PCS orders do not have to be delinquent in their loans or experience a hardship in order to qualify for a short sale. This makes it a lot easier for military families who constantly move as part of their work.
One important thing to note is that the military member’s home must have been bought on or before 30 June 2012 and this new guideline only applies to GSE-backed mortgages. The sale price of the home will also be subject to approval.
If you need assistance finding your new home in San Antonio, let the Real Estate Muses help you.