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A real estate short sale can be hard to understand and many people don't know where to turn to get reliable answers. Some turn to attorneys because it feels safe and like the right thing to do, but you need a seasoned pro who has experience in the field.
Shorting a mortgage loan is something that anyone can do, but only a few can do it right. Attorneys may understand the legalities of a situation and fail to understand how the process works. A homeowner can also run up huge legal bills that are completely unnecessary.
Educational resources are available very inexpensively. Learning the basics can help a homeowner or agent make the right decisions when a mortgage discount is needed to sell a house.
There are services that can negotiate a mortgage short without any money out of a home owner's pocket.
Loan modifications are also becoming very popular for those who want to avoid foreclosure and stay in their homes unlike those seeking a short sale.
26 comments:
I have a Investment property, 4 plex in Las Vegas NV, with loan adjustment coming up soon, i am current with loan, but with adjustment it could be harder.
Thanks
Leo
Hi Leo,
You should contact your mortgage company's Loss Mitigation or Loan Modification department immediately and request a loan modification. You should request a fixed rate and possibly a new term if it suits you. Many mortgage companies are doing them now and the federal government has even begun to encourage mortgage companies to modify. Read about the HUD program at http://www.hud.gov and click the "Hope for homeowners program" link. I would really try hard to get a modification and you can if you act fast and are persistent.
Good Luck!
do i need a license to short sell?
Hi Joshua,
You most definitely do not need any kind of license to short sell real estate. A short sale is nothing more than negotiating with a bank's loss mitigation department and anyone can do it. Some people are under the impression that an attorney or a real estate agent must do it, but that is false. And in fact many attorneys and agents are not properly educated on the process and can do more harm than good. Good luck!
I am helping someone negotiate a short sale on thier property. I found a buyer, they've signed the slaes contract. Can I get paid from the mortgage company as a negotiator?
Hi,
That depends on the bank. Recently banks were approving third party fees for short sale negotiators but times have changed. It is now more often than not that you cannot receive compensation on the HUD from the bank. Some banks are still OK with paying your fee, especially if you play a little hardball.
Good Luck!
Jon,
I'm curious about the differences between a Deed in Lieu and a Short Sale.
You said that the mortgage company will forgive the debt on either?
If that is true, would it make sense for me to take a 5 year credit hit (D-in-L) if I don't want to bother with a Short Sale (5 year credit hit)?
Rick
Georgia
Hi Rick,
A short sale is generally seen as a much softer hit on a homeowner's credit (1-2 years before you would be able to purchase another home, potentially). Many people are forced to do a short sale because of declining home values so it will be much more commonplace in the coming years and therefore a bit more acceptable to creditors. A deed in lieu can have a much longer impact on one's credit. I am not a credit expert, but there are people out there that can rebuild your credit for a price.
Good luck!
My wife and I owned our own business and we had to close due to lack of business in Michigan. I took a job 3 weeks ago in Waukegan, IL and my wife is trying to sell our home in Michigan. We are trying to get a pre-approval in Illinois and have a credit score over 800. They only approved us for 120,000. Our current home was appaised at 212,000 3 years ago. We are asking 189,900 and owe 176,000. Realtor gets the rest. The last 2 houses on our street went into foreclosure and this is hurting us. One went for 159,000 the ther for 162,000. Obviously, we can't continue to live apart and be able to afford my apartment as well as the house. Our realtor suggested skipping a mortgage payment to prove hardship. We have a major problem with this because it is not in our nature to not pay our bills. What are our options? All we want to be able to do is purchase a house in Illinois comparable to what we have here and move on with our lives. This situation is made more difficult because we have young children. Any suggestions would be appreciated.
Ian
Jon, I have a great program for funding for short sale flips, in fact up to 50 million dollars, would you be interested in negotiating some portfolio packages, say 10 homes or more, and do you work off of a percentage of each deal or a set fee? Here is the website if anyone else is interested. /Thanks Jon. http://www.DiscountShortSaleFinancing.com
Hi Ian,
It used to be that you can only be delinquent to get a short sale, but times have changed. If you can prove to the bank that the values have dropped significantly and you do not have the money to pay the deficient amount, then you can get a short sale. Contact the bank and tell them the situation and see what they say. Your agent may be unfamiliar with the current trends of the short sale market. Consider contacting our Short Sale Srevice.
State: Florida.
My short sale was approved. WaMu sent me the demand letter and they included a sentence: “WaMu reserves the right to pursue collection of the remaining balance due on the promissory note for loan number XXXXXXX” which is my HELOC. After talking to a lot of people at WaMu and explaining my specific situation all the way to VP level, they agreed to remove this wording from my demand letter and they removed it. I have the new Demand letter 03/18/09) expect to close on 03/31/09.
Is this enough for me to feel free from them trying to collect after the sale?
… or will they still have that right even if they don’t put it in the Demand Letter?
... this is my homestead home (primary residence).
... If they still have the right to try and collect, for how long can they attempt it?
... what can I do to prevet them from comming after me after the sale?
Thanks
Jorge,
Good job! If they removed the language then you are pretty much off the hook. Depending on the laws of your state (seek counsel from a real estate attorney if you are still hesitant) they could still try to collect, but it is highly unlikely since they agreed to remove that phrase. Don't over analyze, you should be in the clear. You did a fantastic job!
Good luck!
I'm going the Deed in Lieu route on my Michigan house. I couldn't compete with the "bank owneds". I did get debt forgiveness though. Good thing because I just lost my job here in Georgia.
I am under contract on the buying side of a short sale in Denver, CO. After inspection has revealed some costly but necessary repairs - rotting flooring and bad plumbing in the bathroom, roof replacement, and an offset pipe on the sewer line - is it reasonable to lower our offer to the bank to help cover the cost even when the property is sold "as is" or are they going to back off ? - the house has been on the market for close to 90 days
If you are Ok with potentially losing the property you should ask the bank to reduce to cover repair costs. They may agree and you never know until you ask. Chances are better that they will reduce and give in to your requests then deny it outright.
Good luck!
I bought a home 2 years ago. Both the titak and loan are in my name alone. Last year my ex-husband and I remasrried, so that I would be covered by insurqnce, as we are both retired. We do not live together, and this is a in name only marriagre. Question......if I go for a short sale, can the band or mortage co. hold him resonsable ?
we got approved by a bank meaning they accepted our contract for a property but gave us only five days to close. we requested an extension of contract , 30 days to close they didnt give us an answer and the next thing we know is that they accepted another party's contract. Is that legal?
Typically only the person on the loan will experience any negative consequences in regards to credit or a potential deficiency.
Shama,
That doesn't sound right at all. Why was there another contract anyway. It is the home seller that signs an offer and accepts it. The bank only approves the release of the lien, not an offer. I always submit only one offer to the bank, because only one offer can be signed and accepted by the home owner. The bank does not own the property and cannot choose offers, only a homeowner can. It sounds like you have some realtors that are ignorant to the process of short sales and are ill advising the home owner and you. Find a new agent.
Good Luck!
Hi,
We bought our house here in CA just past the height of the housing boom, and so now our house is under-water. We bought at ~470k, and last year was appraised at 315k. We owe ~365k on first loan, and ~20k on second loan. Both are fixed. Our monthly payments are $2950 including both loans, HOA, HOI, and property tax. Our income is comfortable and we can afford to stay here, but now the houses on our block that are twice as large as ours is selling for 400k only. My question is: does it make sense for us to stay here and pay close to 3k a month, when others near us probably are paying only 2k or 1.5k per month for a house twice as large as ours? Wouldn't it be better for us to just walk or short sale, then after a few years buy a larger house with a lower monthly payment? To hang in here, would mean to hang in paying 3k/month for 30years in a smaller house. That's not something to take lightly. We also have a bit saved up. If we do short sale or walk, will the bank come after our savings? Unless you can convince me otherwise, I'm starting to realize that we might be better off walking. Also I don't believe the real-estate value will soar as high again in 3-5 years from now, unless inflation goes up like crazy. It just seems like the best thing to do is take the credit hit and walk. Then save up over the next few years, and buy a more comfortable house and afford a more comfortable monthly payment, and lower property tax.
Wow. There are quite a few questions in there. I would recommend contacting me directly by going to http://www.shortsaleway.com/short-sale-negotiating-service.html and filling out the form. My contact email and office # will be in the automated email response after you fill out the form.
I did a Deed in Lieu with debt forgiveness. Is it true (per the internet) that I will owe income tax on the forgiven debt unless I can claim insolvency? The guy claimed that only the foreclosed people get off the hook because it was their main residence. He claims the type of 1099 you get is different.
The mortgage debt forgiveness relief act of 2007 has you covered if it was your primary residence. It states that you are not responsible to the federal government for tax on the forgiven debt due to a foreclosure, short sale, deed in lieu, etc. Go to this website: http://www.irs.gov/individuals/article/0,,id=179414,00.html
This is a great site! Thanks.
My condo is now upside down in value and I want to short sell. I still have a good paying job and has money in my savings. Will the bank not approve of me short selling since I am not faced with any "hardship"?
Hi Chris,
Thanks, we are glad you are enjoying the site! Yes, you can still do the short sale, but they may have different terms in regards to acceptance. They may want a small cash contribution or a note/ promise to pay. If this is the case you will no doubt still make out great if the short sale is done correctly. Consider using our short sale negotiating service, http://www.shortsaleway.com/short-sale-negotiating-service.html.
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