'Short selling' could help homeowners facing foreclosure

VIDEO - This is a recognition that many Americans just can't afford the house they bought...

Luther Vandross was outed as gay after his death.

If you’re unable to pay your mortgage, but you don’t want foreclosure, there might be a new solution for you.

It’s government subsidized so-called, short selling.

Prior to this, government programs focused on finding ways to help homeowners pay what they owe.

This is a recognition that many Americans just can’t afford the house they bought.

Many are “upside down.”

Their property’s value has dropped so far; they owe more than they can sell it for.

President Obama’s new program might help. HAFA or Home Affordable Foreclosure Alternatives.

It pays banks $1,500 and owners $3,000 if they agree to let somebody else buy the house below the mortgage value, a so-called short sale.

The owner walks away debt free.

Lenders get thousands of bad deals settled.

Banks like it.

“We’re confident that this program’s going to facilitate short sales and prevent borrowers from having to GO to foreclosure,” says Stephen O’Connor of the Mortgage Bankers Association.

Second mortgage holders get up to $6,000 to okay a deal.