According to Freddie Mac's Senior Vice President of Single Family Servicing and Real Estate Owned, a short sale is a superior alternative to foreclosure if you have determined that you can no longer afford to keep your home and you have determined that you cannot sell your home for enough money to pay off your mortgage(s).
A short sale may be an option even if you are current on your payments as long as the property is your primary residence, you have an acceptable hardship and your debt to income ratio is greater than 55%.
If you have a 2nd mortgage, Freddie Mac will allow a portion of the proceeds of the sale (up to $6000.00) to be paid to them if they are willing to release their lien and waive their right to collect on the balance.
Timelines have been shortened also. Freddie has shortened the review period to 30 days from the time your servicer (the entity that you make your payments to) receives your completed short sale request package. In an effort to help servicers meet that deadline they have extended delegation authority and have also reached agreements with most private insurance companies so that their approval is not needed either.
If you are worried about your ability to obtain a future mortgage, Freddie Mac has indicated that if you cooperate with a short sale and your financial difficulties are the result of extenuating circumstances beyond your control (i.e., job loss, medical issues, etc) and you work to rebuild your credit, you may be able to obtain another Freddie Mac loan in as little as 24 months.
If a short sale is the route you wish to take, Freddie Mac strongly recommends that you engage the services of a real estate agent that has experience and expertise in working with short sales.
Freddie Mac has indicated that Short Sales are more attainable than ever, as your Southern New Hampshire Short Sale Specialist, I'm happy to help you reach for it!
If you'd like further information about the new Freddie Mac guidelines, the new Fannie Mae guidelines, the new Home Affordable Foreclosure Alternative Guidelines or the new CFPB guidelines and what they mean to you, you can contact me at 603-490-5344.