Short Sale And Walk Away

The New York Times today reports that the Obama Administration is looking into a new program which would take effect on April 5, that would allow homeowners to sell their home as a Short Sale and mandate the banks to forgive the difference on the debt owed.

With the new program the bank servicing the loan would get $1,000. If there is a second loan $1,000 will go to the bank carrying the second mortgage; and the distressed homeowner would then get $1,500 for relocation assistance.

Among the benefits highlighted in the program is the peace of mind many homeowners facing foreclosure would have from knowing that they will not be tracked down and sued for the remainder of the loan, as well as minimizing the damage a foreclosure would have on their credit.