Will a Short Sale be Your Answer?
January 21st, 2009 // 12:45 am @ admin
Are you looking to purchase a home but are wondering if a short sale home is for you? The main reason people look for short sales homes are that they can purchase a home at a substantial discount. The lending company wants to get as much money back on the loan they gave to the person that is now facing foreclosure. Foreclosure is an expensive endeavor whereas the lending company and the homeowner both suffer. With a short sale, the lending company may offer all kinds of financing terms to the new owner along with a short sale keeping a foreclosure off the credit history of the homeowner. In most cases, a short sale is one that will benefit the lending company, the seller, and the new owner all at the same time.
The seller does not want to have a foreclosure on their credit report and they would love to be able to move and keep their belongings. The lending company, of course, does want all the hassles of selling the home, as they are not in the business to sell real estate but to provide loans. Therefore, in most cases, you will have cooperation from both the seller and the lending company.
One thing you must remember, on the other hand, that purchasing short sale homes is not something you should do on your own. You also cannot just pick a real estate agent out of the phone book. Not all real estate agents have the experience to deal with short sales. Short sales have certain criteria that must be met and this situation has to be handled correctly. Remember, the homeowner or seller is in a situation that no ones want to be in – they are losing their home. Going in full force is not the answer. A real estate agent with experience in short sales knows exactly how to negotiate with the seller as well as the lending company to keep all parties happy.
Not all lending companies are going to agree right of the bat. One thing to remember, the lending company by law has the right to pursue for the entire amount of the loan. The lending company has every right to hold the homeowner responsible for every dime of the loan and in some cases, will fight all the way to the end of the foreclosure process to try to receive the full amount of the loan.
On the other hand, most lending companies are willing to negotiate than not in today’s economic situation. There are many homeowners facing foreclosure in today’s market, and lenders are now realizing that a short sale will give them at least the majority of the money owned on the loan in the majority of cases. This will help them clear up the indebtedness of the bad loans while putting money of the books instead of staying in the red.
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Category : Short Sale Questions
Short Sales – an Alternative to Foreclosure
January 20th, 2009 // 12:00 pm @ admin
An Alternative to Foreclosure – Short Sales
For those of you who now find yourselves upside down in your mortgage, facing foreclosure and sometimes even bankruptcy here are a few facts to know.
A short sale is something that the lending market has recently come to terms with as a alternative solution for foreclosure. With the alarming rate of foreclosures coming into the real estate market this step seems to ward off the inevitable and save the seller’s credit.
Most sellers are now finding themselves in the horrible situation of losing their American Dream. When they first purchased their house it was explained to them that when the adjustable rate mortgage kicked in that they could easily refinance the house to a 30 year fixed note with their equity in place. However, the market has turned and now these homeowners are finding themselves with a mortgage that is far in excess of what their homes are worth and lenders are not readily available to refinance. In most instances their loan has been sold and they are stuck with a mortgage that continues to escalate.
A short sale is a process in which you list your house with a realtor familiar with the process. They garnish an offer and submit it to your lender for review. All fees are paid by your lender and in most cases the loan is reported as satisfied. It’s important to remember a few things about the short sales.
1. Sometimes your second mortgage will require you to sign an unsecured note for the balance of the loan. Be prepared for this. Not all lenders do it and I sometimes suggest that the borrower go back at a later date to renegotiate the note.
2. Do not ignore your HOA fees. Your homeowner’s association can and will put another lien on your home and that lien will have to be cleared before the short sale is accepted. You lender will not be willing to pay these fees and in most instances neither will an interested buyer.
3. Most lenders request a financial worksheet, 2 most recent copies of pay stubs, tax returns, bank statements and a hardship letter.
4. Ensure your realtor is familiar with the process and let them know your home is in distress.
5. Short sales take time. Be patient and ready and willing to show your home on a moments notice. Your showing records are very important.
6. Don’t give up! Short sales typically take 60-90 days while the loss mitigation department reviews your short sale.
For more information on the process you can visit my website www.fortbendland.com or contact me directly at Linda@fortbendland.com.
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Category : Short Sale Questions