Short Sales

For a lot of individuals, foreclosure is a dirty word that has negative connotations. But there are times when a foreclosure is the only option for certain situations. I don’t think anyone buys a home with the intention of ending up in foreclosure but life is unpredictable and unexpected things can happen.

Causes which can lead to foreclosure of one’s property are:loss of job, loss of income, major illness, and financial hardship.

Alternatives to avoid foreclosure: affordable homes program, short sale, contact your elected representative-ask them if they can intervene on your behalf, call or vist your local city hall to find out what options might available to you, contact organizations that deal directly with lenders on your behalf such as NACA, or better yet when they visit your city go and speak to a representative. Try to get there early.

An alternative to a foreclosure is a short sale. In a short sale, the bank or mortgage lender agrees to sell the property for less than it’s worth. You the homeowner will experience a loss depending on the finalized price as will the bank. In my opinion, to do a short sale is better than a foreclosure because then the property will not be your responsibility, along with property taxes, maintenance fees, etc.. although your credit will be affected to some degree. A short sale allows a homeowner to walk away from the financial obligations. A short sale might be a viable option for a homeowner.

If you are facing the possibility of a foreclosure or your mortgage lender is the threatening to place liens on your property, I know it’s tough but it’s not the end of the world. Maybe a foreclosure will afford you the ability to close a chapter in your life and start afresh.

Usually, it takes up to 18 months or property to be foreclosed and nowadays banks, especially major banks have been unwilling to work with homeowners to find alternatives to foreclosure. Banks give homeowners the run around, they play phone tags and consistently lose paperwork and information.and you get dizzy speaking to many representatives.

To lose or keep your property is entirely up to you. depending on your own unique situation. If you choose the process of avoiding foreclosure can be a nightmare but it can be done. You need to have lots of patience, understanding and hope that the lenders will work with you. Each individual have to weigh the pros and cons then decide what is best for them.

A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property, and the property owner cannot afford to repay the liens’ full amounts, and whereby the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt.[1] Any unpaid balance owed to the creditors is known as a deficiency.[2][3] Short sale agreements do not necessarily release borrowers from their obligations to repay any deficiencies of the loans, unless specifically agreed to between the parties. However, in California, legislation was passed to preclude deficiencies after a short sale is approved. The same is true of lenders on first loans and lenders on second loans – once the short sale is approved, no deficiencies are permitted after the short sale. (SB 931, SB 458 – Calif. Code of Civil Procedure §580e).

A short sale is often used as an alternative to foreclosure because it mitigates additional fees and costs to both the creditor and borrower. Both often result in a negative credit report against the property owner.

 

Most creditors require the borrower to prove they have an economic or financial hardship preventing them from being able to pay the deficiency.[4]

Creditors holding liens against real estate can include primary mortgages, junior lien holders—such as second mortgages, home equity lines of credit (HELOC) lenders, home owners association HOA (special assessment liens)—all of whom will need to approve individual applications for a short sale, should they be asked to take less than what is owed.

Most large creditors have special loss mitigation departments that evaluate borrowers’ applications for short sale approval. Often creditors use pre-determined criteria for approving the borrowers and the terms of the sale of the properties. Part of this process typically includes the creditor(s) determining the current market value of the real estate by obtaining an independent evaluation of the property with an appraisal, a Broker’s Price Opinion, or a broker opinion of value (BOV). One of the most important aspects for the borrower in this process is putting together a proper real estate short-sale package, including hardship letter explaining why a short sale is needed.

Depending on each creditor’s policy and the type of loan, creditors may accept applications from borrowers even if the borrower is not in default with their payments. Due to the overwhelming number of defaulting borrowers due to mortgage failures and other causes as part of the 2008–2012 global financial crisis, many creditors have become adept at processing such short sales applications; however, it can still take several months for the process from start to finish, often requiring multiple levels of approval.

Share and Enjoy:
  • printfriendly Short Sales
  • digg Short Sales
  • stumbleupon Short Sales
  • delicious Short Sales
  • facebook Short Sales
  • yahoobuzz Short Sales
  • twitter Short Sales
  • googlebookmark Short Sales