Short Sale FAQ’s-
Welcome to the Short Sale FAQ,s page 
Distressed homeowners often find themselves facing foreclosure. A better option may be a short sale. If you are facing foreclosure or need to sell and owe more than your home is worth be sure that you know all your options. On these pages we provide short sale FAQ,s and answers. I trust that you will find it useful. If you a question that is not answered here please feel free to contact me at 602-390-8573.
Can I do a short sale with two loans?
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Can I do a short sale with two loans?
Yes. We can work with both lenders (many times the same lender hold the 1st and the 2nd loans) to put together a Short Sale transaction. Even if the value of your home is below the balance of the 1st mortgage, we can normally get the two lenders to cooperate. In fact we have done short sales with three loans. Anyone of the parties can “kill” the deal but for the most part it benefits them to try and come to a mutual agreement. From the lenders standpoint if they don’t agree to a short sale the first and second could end up with zero if a foreclosure or bankruptcy takes place.
Once again having a realtor the understands how to do short sales and is familiar with the real estate market in Phoenix Arizona is imperative since with two lenders there are now two separate negotiators (that may not have the same outcome in mind) to deal with.
In the end, neither lender wants to own another home through foreclosure so its a process of finding a win win for all parties. (more…)
Do lenders approve all Short Sales?
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Do lenders approve all Short Sales?
In a word no! That is why it is critical to work with someone that has extensive experience at getting your sale approved. I am certified in short sales and have a very high closing ratio on short sales in the east valley.
Some of the pitfalls to a Successful short sale include:
An inexperienced or unethical real estate agent might push a seller into considering a short sale when the seller does not qualify for a it. Sellers must prove a hardship and submit evidence of the hardship to the lender for approval. Some agents list homes as short sales without ever talking to the lenders or pre-qualifying the sellers. Other agents show these properties to their buyers and allow them to write offers that have no possibility of closing. Both of these are fatal mistakes in a short sale transaction.
Lenders Can Counter offer. Many lenders will counter a buyer’s offer on the sale, and may decide to change other terms that could make a sale unfavorable for either a buyer or seller. (more…)
How will a Short Sale affect my credit?
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I am concerned about my credit, how will a Short Sale affect my credit?
The big key here is to avoid foreclosure. By nearly any measure, a foreclosure is the most damaging event your credit status can encounter – worse than bankruptcy. In the course of getting your short sale approved you may miss your mortgage payments, and these will show on your credit. A short sale is often listed on the credit report as “paid not as agreed” Although going through the short sale process can generate many negative feelings for the distressed homeowner they usually don’t compare to having a foreclosure.
By avoiding foreclosure, you will likely be able to resume normal borrowing (car loans, credit cards, consumer goods and such) relatively quickly. This is especially true if the only credit delinquency is on the home. In fact you may be able to buy another home in as little as 2 years. Many homeowners in Phoenix Arizona are doing just that. Future creditors may look at the you as trying to do the right thing in spite of having a legitimate hardship.
I encourage you to speak with an experienced Realtor that is certified to do short sales (SFR) to discuss (more…)
Why would a mortgage company agree to accept a Short Sale?
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Why would a mortgage company agree to accept a Short Sale?
There are actually several reasons why a mortgage company would approve a short sale payoff, including the following;
Legal Concerns
Mortgage lenders have come under legal pressure to work with borrowers to equitably resolve situations where borrowers are unable to meet their mortgage obligation, particularly when the borrower makes an effort to arrive at a compromise solution.
Asset Management Expenses-
If a lender acquires a property through foreclosure, the property will be managed until it is repaired and resold. It is expensive to manage real property assets – homes spread throughout the region, the state and possibly even the nation. Keeping properties maintained, keeping utilities on, making repairs and the administrative costs attached to these activities are all costs the lender would prefer to avoid. A successful Short Sale eliminates these costs (more…)
I am current on my mortgage, will my lender consider a Short Sale?
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I am current on my mortgage; will my lender consider a Short Sale?
Yes, at the start of the current housing crises lenders were telling homeowners that they needed to be behind on their payments before they would be considered for any help including a short sale. This was especially true in Phoenix.
However, that has changed and many people are doing short sales while making the payments. The key is whether there is a financial hardship. There are several situations that might be considered a financial hardship. Some examples might include: Loss of a job, a divorce, an illness, a loan that has adjusted up to a higher payment or a job transfer. (Can’t sell the house because you are upside down.) An investor might experience a hardship if they lose a tenant. (more…)
What sort of hardship would my lender consider legitimate?
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What sort of hardship would my lender consider legitimate?
To some extent, that will depend upon the mortgage company considering the Short Sale request. Generally, so long as the hardship is real and the mortgage company believes the loan is likely to become delinquent as a result, the Short Sale request will be processed by the Loss Mitigation Department. A big key to getting Loss Mitigation to accept a hardship is to submit a strong hardship letter. The hardship letter sets the tone for the entire file.
Below you will find a list of hardships that are common and frequently accepted by mortgage lenders.
- Family illness or injury
- Illness or injury in the extended family – particularly if it forces relocation
- Job relocation when the property is equity deficient
- Job loss or significant income loss
- Divorce or split of domestic partners
- Adjustment in mortgage payment or unforeseen increase in living expenses
- An Investor that has lost a tenant (more…)
How do I get started on a short sale?
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Its easy to get started
The first thing that you need to do is see if you are qualified to do a short sale. Basically that means do you have a hardship that will allow the bank to work with you? Also, do you have time to go through the short sale process? If your bank has scheduled a foreclosure auction date is there enough time to an offer to them? Many lenders are willing to postpone the auction date if we can present them with an offer to buy your house as well as your financial information and the hardship letter. In other words, if the auction date is in week you may have waited too long. (more…)
Is a short sale right for me?
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Is a Short Sale right for me?
If you are faced with a hardship that makes it likely that you will be unable to meet your obligations on your mortgage and your mortgage is underwater, a short sale is likely your best option. For many families short sales are the best option because they are a win-win situation for the home seller and the lender. With a short sale you reach a negotiated settlement with your lender as opposed to being evicted or having your home out from under you at a public foreclosure auction.
Your credit report will say something like this settled for less than the amount owed depending of course on the lender. You will be able to reestablish your credit fairly rapidly. A foreclosure or a bankruptcy stays on your credit report for 10 years. (more…)
What is a short sale?
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What is a short sale?
A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property’s loan. It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the borrower.
In a short sale, the bank or mortgage lender agrees to discount a loan balance because of an economic or financial hardship on the part of the borrower. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender. (more…)
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