Do you owe more than your house is worth?

A short sale can be an excellent solution for homeowners who need to sell, and who owe more on their homes than they are worth. In the past, it was rare for a bank or lender to accept a short sale. Today, however, due to overwhelming market changes, banks and lenders have become much more negotiable when it comes to these transactions. Recent changes in corporate policy and the Obama administration have also improved the chances of getting a short sale approved.But to be technical, here’s a more official definition:

• A homeowner is ‘short’ when the amount owed on his/her property is higher than current market value.
• A short sale occurs when a negotiation is entered into with the homeowner’s mortgage company (or companies) to accept less than the full balance of the loan at closing. A buyer closes on the property, and the property is then ‘sold short’ of the total value of the mortgage.

For homeowners to qualify for a short sale, they must fall into all of the following circumstances:

• Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
• Monthly Income Shortfall – In other words: “You have more month than money.” lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
• Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.

This seems simple enough, but it is a complicated process that takes a certified CDPE expert. Call the Ben Salem team for a free short sale consultation and we will assist you in the quick execution of a short sale transaction.

If I file a bankruptcy, how would that affect the ability for me to sell my home on a short sale?

Filing for bankruptcy during your short sale will only delay the sale. You will need to seek court approval to sell the home. In some cases, it could take 3 or more months to get a court date and may jeopardize the short sale.

Why not just let my home go into foreclosure if I am going to still have potential liabilities?

Several reasons: first, an approved short sale, properly negotiated and reviewed by an attorney, usually means that the debt is satisfied. Banks will generally report that the debt was paid short of what was owed, but it will show as paid. Second, it is preferable to avoid a foreclosure on your record. Fannie Mae has indicated that it will be possible to obtain a loan from them after two years while a foreclosure is five years. Your goal is to satisfy your debt obligations even though you are facing a financial hardship. Doing nothing is usually more destructive.

Can I Short sell a rental property?

Yes, it is possible to short sale a rental property or non-owner occupied property. This type of short sale is treated differently than an owner occupied short sale. Every short sale situation is unique and complex. Because of this, it is important to talk to a qualified expert to ensure that you are aware and understand possible income tax owed.

What should I do if I have already received the sale date?

The first thing you should do is not panic. Secondly, you need to call us at 1-888-825-5519. Even if your foreclosure is one week away, it may be possible to delay the foreclosure proceedings. Many people feel that when they receive an NOS (Notice of Sale), all of their options are out the door. This is not true. It is estimated that it costs lenders up to 40% more to foreclose on a home, so most lenders would rather take a cheaper approach.

What is a Forbearance Agreement?

A Forbearance Agreement is a written agreement with your mortgage company in which you arrange to keep your home. The agreement will normally include two primary elements: The borrower’s promise to remain current on the mortgage going forward Some plan for making up the delinquent interest and other charges. It may mean making additional payments to the mortgage company or the delinquent amount could be added to the loan to be paid later.

My property is in rough shape and needs work, can I still do a Short Sale?

Absolutely, The lender knows the risk of loss goes up when they foreclose on a property that needs lots of work. Aside from expense of completing the work, lenders are not in the rehab business

Why do your homes sell so fast? Do you price them too low?

Absolutely not. We make it our business to know the market, so we can ensure we get the highest possible price for our sellers. Our homes typically sell between 98-102% of the fair market value because of the effective marketing we do. We accomplish this by doing a supply/demand analysis in the immediate area for any home we consider marketing.