What is a short sale?
When is a short sale applicable?
When should a homeowner start their short sale?
Why should a homeowner want to do a short sale? What benefits does the homeowner get for doing a short sale?
How does a foreclosure or a short sale show up on the homeowner's credit report?
Why would a bank accept a short sale?
How can I help you?
What is the difference between a Short Sale and Real Estate Owned (REO) property/transaction?
Where can I get more information regarding Short Sales?
Would I be able to buy a home in the future using a new FHA mortage?
What is Home Affordable Foreclosure Alternatives Program (HAFA)?
Where can I get information about the new Federal Short Sales guidelines?
What is a short sale?
A short sale occurs when a mortgage servicer/lender agrees to accept less than they are owed for an outstanding loan. Short to whom? Short to the lender(s) and any lien holders who have a monetary claim against the property.
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When is a short sale applicable?
When times are tough for the homeowner and his/her family and they’re having trouble making the mortgage payments and they owed the lender(s) more than what their property is worth. Note there are other options available to them. Please see a Real Estate Short Sale/Pre-foreclosure specialist.
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When should a homeowner start their short sale?
Time is of the Essence. It is best to begin a short sale when the homeowner realizes they can no longer afford the mortgage and a loan modification will not work, so the property can be marketed properly and we can work on receiving the highest offer possible. The homeowner needs to act quickly before the foreclosure date or auction sale date.
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Why should a homeowner want to do a short sale? What benefits does the homeowner get for doing a short sale?
Foreclosure is the process in place for delinquent properties. A successful short sale derails that process. If you are unable to pay your mortgage now or foresee that you will be unable to pay the mortgage in the near future, a short sale may be the only pro-active option you can take to try to avoid foreclosure. Doing nothing assures foreclosure which is the worst possible option. Short Sale enables you to 1.) Avoid Foreclosure, 2.) Avoid "Foreclosure" notation on your credit report, 3.) Avoid Bankruptcy, 4.) Let go of financial burden and stress of related to your mortgage delinquencies, 5.) Minimize financial liability, if any, because your house will sell at a higher price in short sale than it will in foreclosure and 6.) Avoid the humility of a public auction of your home. Often times, its best for you to simply sell your home, clean-up the financial debt and move on with your life.
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How does a foreclosure or a short sale show up on the homeowner's credit report?
A credit bureau is the only true source of information for determining how a short sale and a foreclosure is going to affect a homeowner’s credit.
From our experience with homeowners, which is not to be taken as any form of legal advice, foreclosures usually show up as “FORECLOSURE” and can stay on a credit report for seven years. If a homeowner applies for a new loan or has their credit run, the foreclosure could show up. It is also a common disclosure many employers require on most job applications. A short sale is commonly listed as “SETTLED DEBT”, and can be much less harmful to credit. Please consult a credit bureau for how a short sale and a foreclosure will actually affect a homeowner’s credit.
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Why would a bank accept a short sale?
Time is Money. Foreclosure action is expensive and lengthy. During the 12 month or longer foreclosure process, the property is a non-producing possession that is declining in value every day. If the property becomes vacant and/or vandalized, it will cost the lender(s) even more in repairs, maintenance and security. When foreclosure is complete, the lender(s) must still hire a local Broker to list and sell the property. The lender(s) will compare the cost of the Foreclosure vs the cost of Short Sale. If there is little or no equity in the property, the lender(s) will have to conclude that its better off accepting a short and immediate sale.
Lender(s) would rather help you find ways to come current on your home mortgage or approve of a short sale than foreclosure.
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How can I help you?
We helped homeowners’ short sale their properties. Our office specializes in short sale transactions. We also understand that it can be difficult to pay bills, so there is no out of pocket fee for our services. Here is how we can help 1.) We only make money when we successfully short sale your real estate (successfully list your property for sale and negotiate a ‘short payoff’ with the lender(s)), so you know we're working hard to get the job done right. 2.) We negotiate with the lender(s) to pay commissions and fees, you will never be asked to pay a fee. 3.) We partner with our attorney at our office to ensure a successful short sale. Short sales fail when the broker/agent/attorney does not take a proactive role and not familiar with this process. So be sure you hire a qualified real estate short sale specialist. Therefore, if you are ready to resolve your financial burden and sell your equity-deficient home, we have specially trained real estate agent that can help you in your short sale. Please call me at (508) 365-5427, send an email to info@ElizabethCruzRealtor.com or answer the questions found here and someone will get back to you.
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What is the difference between a Short Sale and Real Estate Owned (REO) property/transaction?
Short Sale: Sales transaction in which the seller's mortgage lender agrees to accept a payoff of less than the balance due on the loan. Real Estate Owned (REO): Property which is in the possession of a lender as a result of foreclosure or forfeiture.
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Where can I get more information regarding Short Sales?
You want to get information from a reputable site or organization for example from Housing and Urban Development (HUD), National Association of Realtors (NAR) and NeighborWorks HomeOwnership
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Would I be able to buy a home in the future using a new FHA mortage?
FHA (Federal Housing Administration) issued new guidance to help responsible borrowers who did not fully payoff their mortgage due to extenuating circumstances gain access to FHA financing. Borrowers are considered eligible for a new FHA-insured mortgage if: 1) they were current on their previous mortgage and other debts at the time of the short sale and 2) if the proceeds from the short sale serve as payment in full. We also stated that borrowers are not eligible for a new FHA mortgage if they pursued a short sale agreement to take advantage of declining market conditions, or to purchase another property at a reduced price. Additionally, borrowers who execute a short sale while in default on their mortgage are not eligible for a FHA-insured mortgage for three years from the date of the sale. Lenders, however, can make exceptions if the default was due to circumstances beyond the borrower's control, such as the death of the primary wage earner.
Get up to date information by clicking
Guidance recently published
or HUD
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What is Home Affordable Foreclosure Alternatives Program (HAFA)?
HAFA is part of the Home Affordable Modification Program (HAMP). HAFA provides incentives in connection with a short sale or a deed-in-lieu of foreclosure (DIL) used to avoid foreclosure on a loan eligible for modification under the HAMP program. Servicers participating in HAMP are also required to comply with HAFA.
HAFA applies to loans not owned or guaranteed by Fannie Mae or Freddie Mac, which will issue their own versions. A list of servicers participating in HAMP is available at Making Home Affordable For more information regarding HAFA visit HAFA on Realtor.org
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Where can I get information about the new Federal Short Sales guidelines?
You could start by visting A Much Needed Road Map at Realtor.org
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