Mortgage Blog

The Nations inventory of unsold homes now stands at an astonishing 11 month supply. This announcement follows on the heels of more bad news for the housing market. New home sales in March were down 8% bringing the annual rate to 526,000 homes, the lowest since 1991.

Meanwhile the media sale price for a new home dropped to $227,600 a 13% decline from just one year ago according to the U.S. Commerce Department.  

If you bought your home in the last couple of years and put little or no money down then there is a good chance that you owe as much or more than you home is worth. When you owe more on your home than its current value this is called being "upside down".

But what if you need to sell? Maybe you are being relocated by your employer or you find you just can't manage the payments any more. Foreclosure or Bankruptcy are not the only options There is another choice. Some Lenders are will to accept less than the full balance due on a mortgage. This is called a "Short Sale".

In fact according to the National Association of Realtors 18% of homes for sale in March were "upside down" so you certainly won't be alone in your predicament.

The first step should be to find out what your home is likely to sell for. Contact a good local Realtor and they should be able to answer that question. Next you need to factor in any potential Realtor commissions and closing costs etc. Deduct these costs from the expected sale price of your home and now you know what you can expect to net. If that figure is less than what you owe you might consider contacting your Lender to see if they will accept a short sale.

Do not contact the Lender customer service department as they will not help you. Instead ask to speak to the "loss mitigation department". If you don't get anywhere at first keep trying. A Lender will often be willing to settle for something less than the full amount they are owned if it means they get most of the money upfront.

But don't take this for granted. Some Lenders will not agree to this course. Some others will still hold you responsible for paying back the difference at some point. You should know that there can be legal and tax implications to accepting a short sale so as always contact your lawyer and tax accountant before taking this drastic step.

Florida bucked the National trend in existing home sales for the Month of March according to a report by the National Association of Realtors. The NAR reported sales of single family homes in Florida jumped 10% over the previous month's numbers although sales were still down 26% from March of 2007.

Sale prices continued to slump with the median selling price for existing homes falling to $205,600, down 15% from the number one year ago. Nationally Single Family home sales dropped 2.7% from February to March.