Many of us have received orders, and having bought a home in the past 2-4 years, are now
faced with the harsh reality that our homes are probably worth less in the current real estate market than what we owe on our mortgage. The real estate lingo for this transaction is a “short sale”, and this is a major concern for our military families. What are the options available to these families?
In order to avoid default or selling short which can often impact finances and credit ratings, some families have chosen to leave family behind or are attempting to rent out their properties rather than selling them. However, those options are not always the most desirable, so let’s take a look at some programs that are available.
VA Loan Compromise: If the homeowners utilized the VA Loan Program, they can contact their mortgage lender and ask to be considered for this program. Currently, under this program, receiving Permanent Change of Station orders does constitute as a qualifying hardship. One of the benefits for this program is that there typically isn’t a hit to their credit ratings and usually the VA doesn’t require recourse (having to pay the money back) for the shortfall. However, this does have an impact on future VA loan eligibility but often this is a minimal consequence.
Housing Assistance Program (HAP): This program was originally created in the 1960’s to help families that were affected by base closures. In 2009, Congress voted to extend this program to help new categories of military homeowners including personnel seriously wounded during Post-9/11 deployments; surviving spouses of members killed during deployments; and military members who bought homes before July 1, 2006, and were reassigned between Feb. 1, 2006, and Sept. 30, 2010. Unfortunately, this only covered a specific timeframe and the $550 million appropriated by Congress has been spent and no other families are receiving aid. There have been calls for Congress or the Dept. of Defense to support more funding, but that hasn’t happened yet.
Fannie Mae and Freddie Mac: These mortgage organizations have now changed their guidelinesto loan servicers to say that a military move is a qualifying hardship that would enable homeowner to access some of the assistance programs. Many lenders will work with the homeowners on plans that are intended to help them financially, such as some type of loan modification.
Foreclosure: The last resort for most homeowners would be foreclosure. Foreclosure is the process of the mortgage holder regaining ownership of the house, due to the homeowners not making their payments. Since there are many other approaches that are more desirable and less of an impact financially in the long run, foreclosures should be avoided. Short sales and loan modification programs should be attempted first.
For anyone that needs assistance, a good resource is a local real estate agent in the Langley market that understands the various options available and can help the homeowners with getting started in the right direction.
The Liz Moore & Associates’ Military Team specializes in homes for sale in Newport News, Hampton, York County, Poquoson, and Williamsburg, VA as well as surrounding markets. They know the best buys, and are experienced negotiators in the Langley AFB market area, as well as offering Air Force friendly support to families relocating to Langley Air Force Base. When you PCS to Langley AFB, VA, you will find that our team understands that when a family member enlists in the military, the entire family joins…thank you for serving our Country, and we look forward to serving your real estate needs!
Don’t forget to ask us about our special One Dollar Move In program for our military clients!
When you’re transferred to Langley AFB, if you’re interested in homes for sale near Langley, call 757-873-2707 or e-mail us at LangleyPCS@lizmoore.com .