Short Sale FAQ's

A Short Sale is complex real estate transactions that you might have a lot of questions about.
Here are answers to some of the most frequently asked questions. 

Q:  What is a Short Sale?

A:  A Short Sale is also known as a real estate short pay-off or a pre-foreclosure workout, it is a win-win solution for the Homeowner and the lender. The lender gets a quick sale at a market price. The borrower saves their credit from foreclosure and generally gets relief from possible future legal actions and deficiency judgments.

A Short Sale occurs when a borrower sells their property for a sales price less than the amount owed to their lender(s). In order for this to take place the lender(s) must agree to a discounted payoff; meaning the bank(s) gets paid less than the full loan amount owed.

The end result is your home is sold, the mortgage is satisfied (paid off) and you prevent a foreclosure.

Q: How can I qualify for a Short Sale?

A:  A Short Sale is for Homeowners suffering financial and personal hardships. You must be able to provide evidence of a hardship. It is not simply an escape from an investment someone wished he or she did not make. Lenders are placing increasing focus on whether there is a true hardship.  Our experienced Foreclosure Consultants are standing by to answer all of your questions either in person or via telephone. 
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Q:  What is considered an acceptable hardship?

A:  While each Homeowner’s situation is unique, the following can be considered to be an acceptable hardship:

Payment Increase or Mortgage Adjustment Loss of Employment Business Failure Damage to Property Death of a Family Member Divorce or Separation Military Service Reduced Income Job Relocation Illness Incarceration

 

As a part of Our Service, we can assist you in explaining your hardship to your lender.

Q:  I have an investment property. Can I qualify for a Short Sale?

A:  Most definitely, as long as you can provide proof of a financial hardship. One of our experienced Foreclosure Consultants is available to answer all of your questions. 
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Q:  What are the Benefits of a Short Sale?

A:  When a Short Sale is achieved, there will not be a foreclosure. 

• Foreclosure damages credit for up to 10 years.  Many experts believe that a foreclosure is much worse than a bankruptcy. Short Sales appear on your credit report as "pre-foreclosure in redemption", not as "debt discharged due to foreclosure" Less impact on your credit score.  Through a Short Sale, you will be eligible, under Fannie Mae guidelines, to buy another home in 2 years instead of 5 to 7 years if your home forecloses.
• Our Short Sale Service is FREE to you; the lender covers all the costs involved.
• With a Short Sale, it is possible to convince the lender to give up the right to pursue a deficiency judgement against the you, whereas 100% of foreclosures in Nevada, the bank has the right to pursue a deficiency judgement.
• A Short Sale does not challenge most security clearances, whereas a foreclosure is the most challenging issue against a security clearance outside of a conviction of a serious misdemeanor or felony. If a borrower has a foreclosure and is a police officer, in the military, in the CIA, security, or any other position that requires a security clearance, in almost all cases, clearance will be revoked and the position will be terminated.  A foreclosure in many cases is grounds for immediate reassignment or termination. Employers have the right and are actively checking the credit regularly of all employees who are in sensitive positions.

Q:  Will the lender come after me for the deficiency on a Short Sale?

A:  Possibly. In some cases, we can negotiate with the lender to not seek a deficiency judgment against the homeowner.

Some lenders, as a matter of policy, will not seek a judgment against the homeowner because they feel they have waived their right by accepting a Short Sale. The lender could simply write the balance off.

You maintain control over whether to accept the Short Sale terms offered by the lender through the process. Your Foreclosure Consultant will keep you informed and educated throughout the entire process.

Q:  What about tax consequences?

A:  Please visit http://www.irs.gov/newsroom/article/0,,id=174034,00.html for more information. Always seek tax advice from a qualified Tax Attorney or CPA.

Q:  If I elect to do a Short Sale, how much will I have to pay to sell my home?

A:  Our Service is at no cost to you.  When your lender approves the Short Sale, all commissions/fees, title and escrow fees, and even most repair expenses are paid by the lender as a part of the Short Sale approval.
Remember, lenders approve Short Sales and accept the resulting loss in an effort to avoid bigger losses through foreclosure.

Q:  Why would my mortgage company agree to accept a Short Sale?

A:  There are actually several reasons why a mortgage company would approve a Short Sale payoff, including the following:

· Legal Concerns: Mortgage lenders have come under legal pressure to work with borrowers to equitably resolve situations where borrowers are unable to meet their mortgage obligation, particularly when the borrower makes an effort to arrive at a compromised solution.

· Wall Street is watching: Mortgage lenders rely heavily on their ability to package and sell bundles of loans on the secondary mortgage market. They need to sell these bundles of loans in order to put the funds back to work by loaning the money again and collect loan fees along the way. If mortgages perform poorly after they are sold it could impact the lender's ability to sell their loans on the secondary market. A successful Short Sale gets the loan payoff resolved quickly.

· Asset Management Expenses- If a lender acquires a property through foreclosure, the property will be managed until it is repaired and resold. It is expensive to manage real property assets spread throughout the region, the state and possibly even the nation. Keeping properties maintained, keeping utilities on, making repairs and the administrative costs attached to these activities are all costs the lender would prefer to avoid. A successful Short Sale eliminates most of these costs.

· Reserve Requirement- Delinquent and non-performing loans place another burden on mortgage lenders. For all delinquent and non-performing loans lenders must set aside funds in reserve to deal with potential losses. These funds cannot be put to work generating new loan fees until the bad loans are resolved. A successful Short Sale allows the lender to put more money to work.

Q:  Can I sell my property for any price?

A:  Absolutely NOT. Lenders are looking for specific ratios in comparison to market value, and lowball offers have nearly a zero chance of working. If your lender believes it is better off financially to foreclose, they will do so. They WILL ultimately foreclose if you do nothing.  Doing nothing is NEVER an option.
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Q:  I have two loans, can I still do a Short Sale?

A:  Yes. We can work with both lenders.(many times the same lender holds the first and the second loans) Even if the value of your home is below the balance of the first mortgage, we can normally get both lenders to cooperate.

In the end, neither lender wants to own another home through foreclosure.

Q:  Do lenders approve all Short Sale requests?

A:  No one can truthfully guarantee a Short Sale effort will work.
For this reason, it is extremely critical to work with a Foreclosure Consultant that has extensive experience in getting Short Sales approved. The chances of a successful approval when dealing with an agent who is not trained in this area is very slim.
From the initial contact with the lender(s), to the proper submittal of the Short Sale package, we know how to keep your file moving towards approval. Our Foreclosure Consultants know how to communicate with the lending institutions from serving many years in the Mortgage lending industry. Put our expertise to work for you by Calling Today!  (702)454-0001 or

Click Here Now to Get PreQualified for a Short Sale.

Q:  Why would my mortgage company agree to accept a Short Sale?

A:  There are actually several reasons why a mortgage company would approve a Short Sale payoff, including the following:

· Legal Concerns: Mortgage lenders have come under legal pressure to work with borrowers to equitably resolve situations where borrowers are unable to meet their mortgage obligation, particularly when the borrower makes an effort to arrive at a compromised solution.

· Wall Street is watching: Mortgage lenders rely heavily on their ability to package and sell bundles of loans on the secondary mortgage market. They need to sell these bundles of loans in order to put the funds back to work by loaning the money again and collect loan fees along the way. If mortgages perform poorly after they are sold it could impact the lender's ability to sell their loans on the secondary market. A successful Short Sale gets the loan payoff resolved quickly.

· Asset Management Expenses- If a lender acquires a property through foreclosure, the property will be managed until it is repaired and resold. It is expensive to manage real property assets spread throughout the region, the state and possibly even the nation. Keeping properties maintained, keeping utilities on, making repairs and the administrative costs attached to these activities are all costs the lender would prefer to avoid. A successful Short Sale eliminates most of these costs.

· Reserve Requirement- Delinquent and non-performing loans place another burden on mortgage lenders. For all delinquent and non-performing loans lenders must set aside funds in reserve to deal with potential losses. These funds cannot be put to work generating new loan fees until the bad loans are resolved. A successful Short Sale allows the lender to put more money to work.
Click Here To Get Started.

Q:  Is a Short Sale right for me?

A:  No situation is exactly the same. In general, if you have the ability to pay your loans, you should do so.
Mortgage lenders are increasingly willing to work with Homeowner’s faced with a financial hardship to accept a discounted payoff on a mortgage. If you are faced with a hardship, and are unable to meet your obligation on your mortgage, your lender would prefer to settle the matter with you as opposed to taking the property through foreclosure.

As you consider the option of pursuing a Short Sale, remember your lender is looking to limit any potential loss on your loan. By completing a Short Sale, your lender has arrived at a solution that is, for them, much better than a foreclosure.

Bottom line, your lender wants to work with you and Our Foreclosure Consultants have many years of experience in the Mortgage Lending Industry. It is our job to work with the lenders to negotiate Short Sales 5 days a week. We know how to deal with lenders and have in-depth knowledge of how these institutions work.
We stop foreclosures from occurring daily.
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