Some promising information for those home owners who went through a foreclosure, short sale, bankruptcy, or experienced a deed in lieu is now available.

The FHA has a new plan called the “Back to Work Plan” for home owners who lost their home due to extenuating circumstances and are now back to work.

FHA has guidelines that need to be followed and a counseling course that needs to be completed.  This program may not help everyone, but it may help you.

Read about the guidelines and requirements at http://backtoworkprogram.org/

Information and photo compliments of FHA

Newly Revised FHA Guidelines !

  FHA is continuing its commitment to fully evaluate borrowers who have experienced periods of financial difficulty due to extenuating circumstances.

Borrowers that may be otherwise ineligible for an FHA-insured mortgage due to FHA’s waiting period for bankruptcies, foreclosures, deeds-in-lieu, and short sales, as well as delinquencies and/or indications of derogatory credit, including collections and judgments, may be eligible for an FHA-insured mortgage if the borrower

•  has completed satisfactory Housing Counseling, as described in this ML, and
•  meets all other HUD requirements.

A short sale is when a home sells for less than the seller owes; a short sale may help some home owners avoid foreclosure.  A short sale will be a much smaller infraction on a credit report than a foreclosure which stays for seven years.  Shorts sales are the hear and now of real estate, they have been around for a long time, longer than most of us remember and they are not going away anytime soon.  What is going away is the Mortgage Forgiveness Debt Relief Act, which expires at the end of this year.   Many people trying to short sale their homes right now are crossing their fingers and toes hoping that the contract is complete before the end of 2012.

So why does a short sale take so long?  The short sale process is not precise, most banks go through a similar process, and all are known for taking their time, dragging their feet, and making the most patient buyers and sellers crazy.  There is no time frame for a short sale; short sales of every amount take varying times to be completed.  Some lenders are working faster than others and have better reputations for closing short sales faster.

There is new legislation proposed by three senators called the Prompt Notification of Short Sale Act to try and speed up the short sale process.  Murkowski a republican from Alaska, Brown a republican from Massachusetts, and Brown a democrat from Ohio are proposing a bill that would require banks to provide a written response to the involved parties no later than 75 days from the receipt of the request from the buyer.  The short sale written response can include an acceptance, rejection, counter offer, extension or estimation of continued time.  In most cases 75 days is a huge improvement.  If an extension is needed, one and only one can be granted for no more than twenty-one days.  If the lender violates this act they will have to pay the buyer $1000 and reasonable attorney fees.

Passing this legislation could be a step in the right direction for the housing economy.  Short sales do not bring down the homes values as drastically as foreclosures.  Most people are happy after they finally complete their short sale.  Remember to always do your homework when entering into a short sale contract and consult professionals to help you with your questions.  Be patient, the time waited could equal a great investment and home ownership for the buyer, as well as less credit problems for the seller.