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Is Your Transferee Still Underwater?

A month ago, we released an EBook all about Generation X. While we discussed several of the traits and values of this generation, we also covered some of the specific challenges Gen X may have when it comes to relocation. One of the points that stuck out most to me was the fact that Gen X took the brunt of the economic downturn on the chin and, today, they are still working to stand back up. Most of Gen X angst has to do with the housing market so, today, I wanted to share some information about what to do if your Gen X transferee is still underwater on their home.   

Unfortunately, Gen-X was hit hard by the real estate crash. Even though the market is improving, Gen-X had fewer resources to dig out from under falling home prices. According to Zillow, a good portion (18.7%) of Gen-X homeowners are 20 Facts about Generation Xstill underwater. Thus, if you are relocation a lot of Gen-Xers, you should still be prepared to address negative equity and loss on sale. Some strategies include:

If the loss is not that great, you may wish to provide additional funds in a one-time payment to help your transferee move forward. If you cannot provide loss on sale relief, you should urge the transferee to discuss a short sale with their lender.

When discussing a short sale, your transferee (or relocation provider) should explain to the lender that the market analysis dictates the home will not sell high enough to cover their loan amount.  The lender may agree to accept a short sale knowing that the transferee is moving away and may not have any other option. This will prevent the home from going into foreclosure.

Finally, if that doesn’t work, your transferees may decide on their own to rent their home until the market picks up.  We do not encourage this as it still financially ties the transferee to the origin location.  However, sometimes transferees simply cannot accept the loss and must wait it out.

There is, however, some good news. The housing market is bouncing back and we are optimistic about home prices in 2015. Hopefully, it won’t be too long before that 18.7% drops considerably.

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MIKE CANNING
VP, Client Services

RICK CALANNI
VP of Business Development Northeast Region

 

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