What do you do if you owe more than your home is worth? You could simply walk away from the mortgage, as one professor suggests. But through a change in the works from the Obama administration, it should be slightly easier to get rid of the home without the stigma or complications of a foreclosure.
As explained by the WSJ, the program gives incentives for short sales, in which the lender OKs a sale even if the price is less than what’s still owed on the original mortgage. Through the program, borrowers can receive $1,500 and lenders can get $1,000 if a short sale is completed. It’s not much, but it’s something. In certain situations, this should help get a deal done.