Benefits of Doing A Shortsale
NO FORECLOSURE ON YOUR CREDIT REPORT Thats right! Upon a successful shortsale you will not have a foreclosure showing up on your credit report for years and years.
YOU NEVER HAVE TO SAY YOU HAD A FORECLOSURE. Do you know that if you get a foreclosure on your records you have to disclose it for just about anything you apply for in credit, including renting a place, sometimes even jobs that you apply for? Not only does it affect the rate they will give you, but many times you get denied that job/credit just because of something that happened years ago that you had no control over!
YOU DON'T HAVE TO GET EVICTED FROM YOUR OWN HOME! Did you know that after the sale of your home at auction you will be evicted by the sheriff from your own home. By doing a shortsale you get to move conveniently on your own schedule, without any embarrassment.
YOU GET TO FINALLY SELL YOUR HOUSE Yes, thats right, with a successful shortsale, your house is finally sold and you get to move on with your life!
CLEARED CREDIT REPORT with a successful shortsale your credit report may actually say: "paid in full for amount less than owed" which is way better than foreclosure!
YOU GET TO RECEIVE MONEY FROM A SUCESSFULL SHORTSALE If equity allows it you may be able to get money from the sale of your household items (versus getting nothing from a foreclosure).
BETTER TAX IMPLICATIONS Thats right, your tax implications are much better through a shortsale because we are obtaining agreement from your lender(s) to accept this difference upfront, rather than forced through a sale at the foreclosure auction. You would be less likely to be held for anything and even if you are held for any amount, the amount is typically less than if the property went to foreclosure.
YOU CAN STOP THE BANK FROM TAKING YOUR HOUSE Yes, remember you own the property until the actual sale date at the foreclosure auction. You have options, including a shortsale. Through this process you can stop the bank from taking your property.
YOU CAN TAKE CONTROL OF YOUR SITUATION Yes, you can actually take control of this situation that may seem like you have no control over. There are options, give us a call 1 866 MR BUYER or Click Buy My Property
Frequently Asked Questions About Shortsales
What is a Shortsale? A short sale or negotiated settlement or short pay occurs when a lender agrees to accept less than the amount owed as a payoff on a loan. If the property is worth less than the amount owed on the loan, then even if the bank forecloses and takes back the property, they know they are going to take a loss. We can often convince them that the bank will do better if they take less than what is owed now rather than taking the property back by foreclosure and trying to sell it later.
Why do I need to do a shortsale? The current debts secured by the Property exceed the value of the Property and therefore there is no equity in the Property. Seller has been unable to sell the Property using traditional means due to the fact that the debts on the Property exceed its value, therefore a shortsale must be initiated.
How long will it take? The short sale negotiation process is a lengthy one. It may take several weeks or even months to get an approval. Many lenders have several layers of bureaucracy, insurers, and investors that we will have to maneuver through in order to get a short sale approved. So it is important to be patient during this long process.
I've been served papers of Lis Pendons, do I still own my house??
Yes, you do. You own your house and still have all the rights to sell, rent, etc. your house as you wish, but the clock is ticking quickly Contact us immediately and we'll go over your options.
But my house is going to foreclosure, will I have enough time? Maybe, maybe not. Just starting a short sale will not automatically stop a foreclosure. However, many times we can convince a bank to stop the foreclosure to let us attempt to negotiate the process. So, while there are no guarantees, it does not hurt to try.
Can I stay in the house/property? The key word in short sale is sale. The purpose of a short sale is to get the property sold. So you will be moving. This is not a program that can stop a foreclosure and allow you to keep the house indefinitely. It will be easier to sell the property if it is vacant, so you should make plans to move as soon as possible.
Will I get any money from the sale? NO. A universal requirement of lenders in granting a short sale is that the borrower will not get any proceeds from the sale of the property. The bank is going to take a loss on your loan they are not going let you get any money. However sometimes we may be able to purchase furniture/appliances and thus get you some funds.
What happens if this doesn't work? Your house will likely go to foreclosure. A short sale is something we try after you have exhausted your other options. However, if the debt exceeds the value on the Property, the lender will want to work something out, and while we cannot make any guarantees, there is a very good chance it will work.
What happens to the amount owed after the shortsale?
It depends. When a shortsale is accepted and your lender accepts less than the balance, some lenders accept this new amount as Paid In Full, some do a 1099 at the end of the year for the difference, and some will reserve the right to try to collect on the difference. Now remember, if they try to collect, they are now trying to collect on an "unsecured" loan where there is no more collateral because the property has been sold. If they do that (which is very rare), the chances of actually collecting are slim. We find most large banks just wipe it off as a loss. Smaller local banks because it affects their bottom line sometimes attempt to collect.
What is A Release? A lender may offer to release its security interest against the property in exchange for less than the total amount of the note. A release will allow the property to be sold without paying off the obligations of the note. However, the note is not satisfied. Advantages: This successful short sale will allow the property to be sold and thus avoid a foreclosure. Disadvantages. The debt on the property still exists. You are still liable for the note in other words -- you still owe the money. Reality. It is not likely that the bank will pursue the deficiency unless you have other significant assets.
What Is a Satisfaction? A lender may agreed to accept less than it is owed as complete and total satisfaction of the note and release its lien against the property. Advantages: Your note and obligation to the lender is satisfied for less than you owe. When the property is sold, the debt is paid off completely. Disadvantages: You may have some tax consequences that you should discuss with your tax advisor.
Can I do a Shortsale while in Bankruptcy? Yes. In fact its many times easier because the bankruptcy will discharge the note, and all you are left with is the mortgage. Also, technically its a violation of federal law for the bank to ask for financials disclosures from the debtor because who filed Chapter 7 bankruptcy its illegal to attempt to collect a debt thats been discharged in a bankruptcy.
Why don't I just walk away and let the bank take the property? Actually, you can do that, its your right, but the reality is the bank will typically go for the maximum collection on the full amount and you will have a foreclosure on your records for 7 years or more. If you qualify and we do the shortsale for you, you can still walk away after we start the process, but this time we'll help you avoid the foreclosure completely and fight the banks on your behalf!
Should I Stop Making Payments During the Process? We are not in a position to make legal or tax advice to you. We cannot tell you to keep making payments or stop making them. However we can say that when you make your payments every month the lender is making a "profit" on your loan and not typically encouraged to shortsale your loan. When you are not making payments they are much more eager to negotiate a shortsale. Also, almost all of our sellers are not making payments on their loans during the shortsale process.
What do I Need to Do?
The lender(s) will require some documentation, please bring as much of the following as possible:
- Last 3 months bank statements
- Last 2 W-2's
- Last 2 years Tax Returns or Schedule C if Self Employed
- Copy of Drivers License for all borrowers
- Copy of Mortgage Statement for all Mortgages, HELOC's, etc.
- Copy of 2 most Recent Pay Stubs
- Copy of bankruptcy discharge or filing information, if applicable.
- Copy of any Listing Agreements within past 12 months, if applicable.
- If property is still listed--proof that you have gotten out of listing with the broke
- Any Documentation that will help prove your hardship (medical bills, job terminations, divorce, etc.)
- Garage Door Openers.
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Any documentation related to the property would also be helpful (survey, appraisal, manuals, etc.)
- If property is Rented: Copy of any Lease(s)