Ann Urias

Why would a bank or mortgage lender want to do a short sale?

A common saying is that banks are in the business of lending money and do not want to own real estate. This is slightly misleading but is essentially true. When a bank takes a property back via foreclosure, it is a long and expensive process and often results in holding the property in their inventory as a non-performing asset. Banks have a limit to the amount of non-performing assets they want to hold. Once this limit is exceeded, they have strong incentive to get rid of the properties at discount prices.

For a lender, doing a short sale avoids many of the costs associated with the foreclosure process. Attorney fees, delays from borrower bankruptcy, damage to the property, costs associated with resale, property tax, insurance, etc. all must be paid by the bank during a foreclosure. In a short sale scenario, the lender is able to cut its losses by getting rid of the property faster.

Will a short sale "save my house"?

In the sense that you will be able to continue to live in the house, unfortunately the honest answer is no. A short sale is only done involving a legitimate sale of the home from the foreclosed owner to another unrelated party.

Many of the cards and letters you have gotten have probably promised to save your house, however this is very seldom possible. We would ecommend that you NEVER sign away your deed to someone who promises to "save your house" from foreclosure. It is probably a scam.

Will a short sale "save my credit"?

The short answer is yes and no, a short sale can save you from the worst credit disasters.

By defaulting on mortgage payments and having a foreclosure filed against your property, you have already done damage to your credit. Your credit score has declined and those negatives will stay on your credit report for some time. However, it will get much worse if you allow the foreclosure to continue and do not try to short sale the property.

Once a foreclosed property is sold at auction, your credit score is further reduced and when the foreclosure is completed via eviction and repossession of the home, your credit will be even further damaged. If you can complete the short sale BEFORE either of these takes place, then you can prevent that further damage to your credit. In addition, when the short sale is completed, it shows up on your credit as a "Paid" mortgage and a canceled foreclosure, which shows future creditors that you did take care of your obligations.

If your situation eventually winds up in bankruptcy, then that is the worst item that could appear on your credit report and it will remain there for years and cause numerous difficulties in getting future credit. A short sale can help avoid this, but the key is not to wait.

WWW.OCSHORTSALEREALTOR.COM FOR ALL MY LISTING.

WWW.REMAXANN.COM FOR MORE INFO.

Q: What is a Short Sale?

A: A Short Sale transaction occurs when the lenders are paid a negotiated amount that is less than the actual principal balance owed.

Q: Why are the Banks Accepting Short Sales?

A: In a foreclosure, the lender incurs legal fees and may not take possession of the home for several months. When the lender takes possession, the condition is unknown, and the home will have to be sold regardless.

Q: How are the Selling Costs Paid?

A: In a successful Short Sale transaction the selling costs are absorbed by the lender.

Q: What is a Mortgage Default?

A: A mortgage is considered to be in default when one or more monthly payments have been missed.

Q: What Solutions are Available if I am in Default on My Mortgage Payments?

A: You may qualify for a broad range of solutions to help you during your hardship.

Short Sale/Payoff

Loan Modification

Deed in Lieu

Q: How do I Qualify for Assistance?

A: Borrowers need to prove that they are experiencing a substantial financial hardship.

Q: What is a Hardship?

A: A hardship is a situation that has a life changing effect for the borrower that results in an in-ability to pay the mortgage debt in either, short or long term. Some examples are:

Separation or Divorce

Medical Bills

Inability to Work Due to Health Reasons

Death of Spouse

Job Relocation

Reduced Income or Unemployment

Business Failure

Q: How Do I Qualify for a Short Sale?

A: A borrower must prove that a hardship exists. Then the lender must be willing to accept the short sale proceeds as full settlement of the debt.

Q: What is Required From the Property Owner?

Sign a Listing Agreement with Your Realtor

Agree Not to Finance or Otherwise Encumber the Property's Title

List the Property for Sale

Cooperate with Your Realtor with the Accessing, Showings, and the Offers of Your Home

Be Responsible in Maintaining the Home in "Show" Condition

Be Responsible for Minor Repairs to the Home

Be a Responsible Homeowner Until Close of Title and Vacancy of Home

Vacate the Home Following the Close of Title

Q: What is the Mortgage Forgiveness Debt Relief Act of 2007?

A: The Mortgage Forgiveness Debt Relief Act of 2007 was enacted on December 20, 2007 (IR-2008-17). Generally, the Act allows exclusion of income realized as a result of modification of the terms of the mortgage, or foreclosure on your principal residence. Please see a real estate CPA for further information.

Missed Some Mortgage Payments?

Is the Bank About to Put You Into Foreclosure?

Would You Like to Keep Your Home?

WE CAN HELP YOU!

We will advise you of your pre-foreclosure options and may be able to help stop the foreclosure proceedings as well as even saving your credit. Default situations are time sensitive so trying to avoid dealing with the overwhelming situation is simply unwise. Let us try to provide you with the quality of life both you and your family should have.

For a FREE Consultation Call (714) 588-7676

or visit www.ReMaxAnn.com

Although the topic of deficiency judgments has been on the internet, it is one of the most commonly asked questions that homeowners have regarding losing their homes to foreclosure. One reason for this, of course, is the fact that home values have decreased nationwide, and foreclosure victims know that their properties will not sell at the county sheriff sale for an amount that will pay off the loan in full. Therefore, they are worried about having to pay the difference to the mortgage company, and the possibility of the lender suing them after foreclosure and going after their other assets. However, in nearly all cases, there is no danger of former homeowners being sued for a deficiency judgment after they have lost their homes to foreclosure.

To understand how the deficiency is created in the first place, it is necessary to know how the foreclosure auction works and what happens to all of the liens affecting the property. When the sheriff sale of the house is conducted by the county sheriff, the sale proceeds are used to pay off any liens on the title. Most of the time, it is the first mortgage company that purchases the property at the auction, and they bid the minimum amount required by law to take ownership. In effect, they are using their own money to buy the home at auction to pay off their loan to the homeowners. But they do not pay off the entire amount of the loan unless necessary, which will created a difference between what is owed on the house and what is actually sells for at auction. Just because the proceeds do not pay off the entire amount of the mortgage, however, does not mean the former homeowners are automatically responsible for coming up with that difference.

To be responsible for the difference at all, the state foreclosure laws will have to allow the bank to sue the foreclosure victims for a deficiency judgment. Not all states allow this in all cases, so homeowners need to do some research under what conditions a lender in their state can sue after the foreclosure. If the state does not allow for deficiency judgments, then there is no danger at all of being responsible for the difference, and no reason to worry about having the car repossessed or having wages garnished.

Even if they are allowed to sue the homeowners, though, banks rarely go after a deficiency judgment. Just as the foreclosure victims are worried about how they would ever pay tens of thousands of dollars in judgments, the mortgage company is worried about how they would ever be able to collect it and how long the process would take. Foreclosure victims usually go into foreclosure because they lost income, so getting another judgment against them will not help the bank recover any lost profits. In fact, pursuing a deficiency judgment after foreclosure will often prove to be an exercise in futility for both the mortgage company and the homeowners.

Ever further, it will cost the bank more time and money to hire local attorneys to sue their former clients, and then try and collect on the judgment. All of these legal and collections-related expenses are resources expended before the bank can collect even one penny of the debt. Combine this with the fact that they know the homeowners had some financial hardship that caused them to miss their mortgage payments for a number of months, and there is little reason for the bank to believe that the former homeowners will be able to pay the judgment in any time frame that would make it worth it to them. The money that would be used to pursue the deficiency judgment could more effectively be put towards new loans or investments.

So, homeowners almost never need worry about being sued by their bank after the foreclosure, even if the foreclosure laws allow it. The bank could theoretically try to make them pay the balance after the foreclosure auction, but lenders almost never do this. Unless the homeowners were extremely wealthy and owned numerous other liquid assets, the bank will simply move on and allow the foreclosure victims to move on with their lives, as well. This is often the best resolution to the foreclosure for all parties involved. What can happen in theory rarely happens in practice, in the case of deficiency judgments.

Contact Ann for more info.

Ann phn: (714) 588-7676

www.remaxann.com

SHORT SALE HELP ORANGE COUNTY

A Short Sale is a special transaction that allows you to sell your home - even when your mortgage debt
is higher then the value of your home.

We are professionally trained Realtors who have been specifically trained on how to negotiate a
settlement with your current lenders so you can sell the property.

Our commission will be paid by the bank, so you won't have any out-of-pocket expense!
A short sale will help you:

· Avoid Foreclosure

· Avoid Bankruptcy

· Protect Credit Score from "foreclosure"

· Be free of financial & emotional burdens

If you are ready to sell your home and free yourself from this debt, Call me or visit my website www.remaxann.com

Short Sales require a trained professional for a successful transaction, E-mail me today to help you find a solution!

Time is of the essence..........

ORANGE COUNTY SHORT SALE REALTOR (714) 588-7676

Short Sell Your House - Get Educated

Short selling your home is not a decision you should make lightly. It is often a difficult and long process. If you are successful, the difference between what you sell the house for and what you owe on the house is forgiven. You'll also avoid a foreclosure on your record.

Step 1 - Get Educated

You need to know your options when it comes to your home. If you want to keep your house, but can't make the payments and you owe more than your home is worth, you may look into filing bankruptcy. This will stay the foreclosure process (not forever) and may allow you to stay in your home and repay your lender under different terms.

Deed in Lieu

If you owe more than the home is worth, this is not an option for you. Deed in Lieu means that you give up the house to the bank and walk away. Ie, you give up the deed instead of facing foreclosure.

Short Sale

If you owe more than your home is worth, and don't want to declare bankruptcy or face foreclosure, then a short sale of your home is the best option. A short sale does have potential tax implications.

Step 2 - Get Some Help

This is probably the biggest tip I would give to people who want to sell their home in a short sale. FIND AN EXPERIENCED REAL ESTATE AGENT WHO HAS DONE A SHORT SALE BEFORE.Your real estate agent will be able to deal and negotiate with the mortgage company(ies) on your behalf. An experienced short sale agent will give you a much better chance of successfully short selling your home.

Because there is often so many different entities involved in a mortgage (1st mortgage, 2nd mortgage, the investor on the loan, etc) you really don't want to do this on your own, with no experience. Yes, the bank pays all the commissions to the agent, Now you have a much better chance at getting your debt forgiven with a successful short sale.

WARNING! Just because an agent says they specialize in "short sales" does not mean they have actually successfully done one! There are many classes agents attend regarding short sales, but nothing compares to real world experience.

Step 3 - Get Started Now

The longer you wait to get started with the short sale process the less chance you have of success. Every state is different with their foreclosure process. You need to decide quickly to start the short sale process if you're getting behind on your payments, or have already received a notice of default.

Step 4 - Follow Instructions Exactly

An experienced short sale agent will tell you what you need to do to get the house ready to sell. Don't get too hung up about the price. If the agent wants to set a low price on the house, there is a reason behind that.

You need to price the home low to get an offer. You need a buyer that is willing to stick around for a super long closing or changes to the agreement. Don't get hung up about the price, all you should care about is getting the place sold.

Step 5 - Know The Tax Implications

While Congress may change this (and in my opinion, likely will with the waves of foreclosures happening and still waiting to happen) you will owe taxes on the debt that is forgiven in your short sale. If you are considered insolvent (your assets are less than your liabilities), you may be exempt from this tax.

Talk to a qualified tax attorney or CPA about this for your particular situation. Your real estate agent should know about this! A good agent will have a quality referral for you to handle the tax implications of your short sale.

Step 6 - Prepare to move quickly

Because your closing date may not be set in stone, you need to be prepared to leave your home quickly if needed. Usually you will have to move 2 months from the offer date.

Step 7 - Prepare yourself emotionally

If you are already in default, or have a foreclosure pending, this whole scenario and process of trying to short sell your home can be very emotionally draining.

You will receive solicitations from everyone and their mother. You may have people stop by your home while you are still there. It can be a very difficult process.

Make sure you have people in your life to talk to about your situation. You will need a support network to help through this time in your life. It will pass. And you are being proactive in seeking a short sale of your home. You are taking the right steps, and in time, everything will work out. I can't promise it will be easy, but you will make it!

www.remaxann.com

Short Sale Specialist