Frequently Asked Questions

A short sale is when the seller finds a buyer for a price that is below the mortgage amount and negotiates the difference with the lender.

In a deed-in-lieu-of-foreclosure, the lender agrees to take the house back without instituting foreclosure proceedings. These are considered more radical options than lowering the price.

A short sale is a mutually beneficial solution for both the homeowner and the lender. The lender avoids the costs associated with foreclosure and sells the home quickly at a fair market price. For the homeowner, a short sale helps avoid a foreclosure on their credit report and settle any debts. A short sale occurs when the amount owed to the lender(s) exceeds the home’s value. The agent negotiates a lower payoff with the lender(s) to facilitate the sale, ensuring the home is sold and debts are resolved.

• Homeowners can typically continue living in the home during the process.
• Banks often postpone foreclosure proceedings while a short sale is in progress.
• Most liens on the home are settled without requiring further payments from the homeowner.
• In some cases, lenders offer financial incentives for completing a short sale.
• Short sales generally cause less damage to the homeowner’s credit compared to foreclosure.

A “short sale” is for home sellers who are upside down on their mortgage. The home’s value is less than the amount of the mortgage. A hardship must exist, then sometimes home owners can negotiate with lenders and split the difference between the sale price and loan amount, which still must be paid.

A short sale is often complicated. If the loan has been sold into the secondary market, the lender will have to get permission from Fannie Mae or Freddie Mac to negotiate a short sale. Fannie Mae, the secondary market giant, has a policy of looking at each loan individually.

If the loan was a low-down-payment mortgage with private mortgage insurance (or PMI), the lender needs to involve the mortgage insurance company that insured the low-down loan.

Once all these issues are resolved or negotiated, the house may be sold.

Without a doubt a property foreclosure is one of the most damaging events in terms of the borrower’s credit history.

Talking to the lender who holds the mortgage note on the property might provide specific answers as the possible courses of action available to the borrower, as well as to the effects those actions might have on that person’s credit report.

In terms of the effect on credit history, a deed in lieu of foreclosure or a short sale are not as adverse an event as is the forced foreclosure.

However, even after a foreclosure or bankruptcy, there are lenders who are providing loans after 7-10 years have lapsed. The borrower will have many obstacles to overcome and will need to provide a good paper trail to the lender proving they are once again credit worthy.

Bankruptcies and foreclosures can remain on your credit report for 7 to 10 years. However, there are lenders who will consider an applicant who went through a bankruptcy as recently as two years ago, as long as good credit has been reestablished.

Much will depend on when the bankruptcy was discharged and what kind of credit a borrower has reestablished since then. The longer the discharge occurred, the better off a loan applicant will be.

Another factor considered will be the circumstances surrounding the bankruptcy. If a borrower went through a bankruptcy because his or her company had financial difficulties due to downsizing or merger resulting in job loss, that means one thing to a lender.

If, however, a borrower went through bankruptcy because of overextended personal credit lines from living beyond their means, that is quite a different thing.

Although a good idea, it is usually difficult to refinance after a bankruptcy. If you have been struggling but keeping current on your payments the lender may be accommodating. You first need to contact them and explain your situation. They may suggest or perhaps you can suggest a way to work out alternative payments until you recover.

We only get paid when your home is successfully sold. If we do not succeed in selling your home, you owe us nothing.

Yes, it does. While any agent can assist with a short sale, the process is complex. An agent with experience working with lenders significantly increases the chances of getting your short sale approved.

The bank will conduct a broker price opinion or an appraisal on the property. Each lender’s policies vary, but they typically accept offers close to the home’s fair market value.

If a short sale is not pursued or is unsuccessful, foreclosure will proceed. Our goal is to help clients avoid foreclosure by successfully selling their home and settling their debts. A successful short sale often results in the debt being marked as satisfied on your credit report, which is much less damaging than a foreclosure.

• Separation or divorce
• Death of a spouse
• Job loss or reduced income
• Significant medical bills
• Need to relocate
• Inability to work due to health issues
• Changes in mortgage payment or increased monthly expenses
• Business failure
• Other reasons that prevent the ability to pay a mortgage

We require the following documents:

• 60 days of pay stubs
• 2 months of bank statements
• 2 years of tax returns
• A hardship letter
• A financial information form
• A third-party authorization form

If you cannot provide any of these documents, you must submit a letter explaining why and detailing the reasons.