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 Sale Negotiations
December 18th, 2008 // 12:24 am @ admin
If you are heading down the road to foreclosure, you may wish to consider a short sale. This can and will at least protect you from having a foreclosure listed on your credit report, but it still may not completely clear you from all of the money owed to the lending company. The most important part of the entire process of selling your home in a short sale is the negotiation that is done with the lending company.
All lending companies have a department that works with sellers for negotiating all short sales. In the majority of cases, the department is known as loss mitigation. If you begin to talk with your lending company before you receive a notice of default, they may just ignore you totally. All lending companies are in the business to make money and if at all possible, they normally want you to repay the total amount of your loan so the do not lose money.
On the other hand, after a notice of default has been issued and records with the courthouse you can then begin the negotiation process. In most cases, you will not have much to do as most companies have pre-determined criteria for these types of transactions. All banks, lending companies, and mortgage companies have the right to deny or accept a short sale. Due to this fact, they are still going to want as much as they can get for the home so they do not lose more money from the loan that is in arrears. Some lending companies will take any reasonable offer.
A short sale may save you from having a foreclosure on your credit report; however, this does not mean your credit rating will stay excellent. Short sales are considered a type of settlement whereas you worked with bank in order to repay a loan that you were unable to pay. This does not look favorable on your credit report; however, it does look much better than a foreclosure. A short sale will stay in your credit history for seven years. In the majority of cases, you will be able to reapply for another mortgage loan within 1 to 3 years after a short sale.
The mortgage company in most cases, will work with the homeowner during a short sale and forgive the remainder of the loan, however, companies that have a lien on the property most generally will not forgive the money owed to them.
Before contacting the lending company, it would be in your best interest to talk with experts on short sales. Selling your home and saving your credit is the number one reason for short sales of homes, if you are still going to be stuck with a huge debt, and then you will not be any better off than before. Instead of trying to do it alone, talk with experts to ensure you are doing everything possible to save your credit and learn the process of short sales.
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Category : Short Sale Questions