Short Sales

Are you in Financial Distress? Is paying your monthly Mortage getting harder to do? Is so, you might be eligible for a loan modification, a short sale or a deed in lieu. Which of these are for you?

What is a SHORT SALE?  http://youtu.be/49sS88Cbsc8
    I am CERTIFIED to Help!

LOAN MODIFICATION – Call your lender to see if you are eligible to modify your loan. You will need to provide financial documentation (i.e. 2 years of taxes, 2 months of bank statements, 2 pay stubs) for your lender to consider this option.

SHORT SALE - A Short Sale, also known as a pre-foreclosure sale, is when you sell your home for less than the balance remaining on your mortgage. If your mortgage company agrees to a short sale, you can sell your home and pay off all (or a portion of) your mortgage balance with the proceeds from this sale. You may also be eligible for the government’s Home Affordable Foreclosure Alternatives Program (HAFA) which offers short sale and Deed-In-Lieu (DIL) options.

• I am HAFA CERTIFIED - HAFA is designed to help homeowners, who can no longer afford their home, avoid foreclosure and resolve their mortgage debt.

For homeowners to qualify for a short sale, they must fall into any or 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 – Your Income does not cover your mortgage, monthly bills and other expenses; aka “Negative Cash Flow”. A 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.

NEW POLICY CHANGES TO HAFA as of Aug 9, 2011

For more details, go to  --  MORE CHANGES FOR THE HAFA PROGRAM

DEED IN LIEU - A Deed-in-Lieu of Foreclosure (DIL) is where you, the homeowner, voluntarily transfer the ownership of your property (the title and all property associated with it) to the owner of your mortgage in exchange for a release from your mortgage loan and payments.

There are several websites that can provide you with more information.

• http://www.knowyouroptions.com/
• http://www.shortsalescalifornia.org/consumers/

Tax Consequences - For more information about mortgage forgiveness tax consequences, go to California Franchise Tax Board's Mortgage Forgiveness Debt Relief Extended webpage and the Internal Revenue Service's Mortgage Forgiveness Debt Relief Act and Debt Cancellation webpage.  The full text of Senate Bill 401 is available at www.leginfo.ca.gov. 

NEW LAW in Favor of Homeowners going thru Short Sale deficiency -- check this out
New Short Sale Law as of July 2011

LEGAL or FINANCIAL ADVICE - If you have any LEGAL QUESTIONS, please contact an attorney who is familiar with SHORT SALES. I can refer you. If you have any TAX QUESTIONS, please contact a Tax Practitioner or the IRS.

This seems simple enough, but it is a complicated process that takes the expertise of experienced professionals.  I hold the HAFA Certification and am ready to identify all possible options and, when possible, assist in the quick execution of a short sale transaction.

If you have questions or feel you may qualify for a short sale, please contact me for a free consultation.

Understanding your options now could mean all the difference in the world.

Whether you are a FUTURE HOMEOWNER or an INVESTOR … How can you purchase a home or income property in this market?

• NUMBER ONE requirement….PATIENCE!

The present homeowner makes the decision, with their realtor, as to whose offer they accept. BUT it’s their LENDER who makes the FINAL decision on the Acceptance of the Short Sale. This process could take 6 weeks or 6 months, depending on the Lender, number of loans, market value and other factors that could pop up.

When presenting your offer, you must include the following:

• Pre-approval letter ( within 30 days) from your lender of choice
• Pre-approval letter, from the seller’s lender of choice
• Proof of funds – bank statements showing enough funds for downpayment and closing costs
• Good faith deposit – 3% of offer price
• Consider offer price based on MARKET VALUE – in many cases your offer should be HIGHER than ASKING PRICE
• No Termite work, No Repairs, No Home Warranty
• If your offer gets accepted, be PATIENT. I advise my clients as to the progress of the short sale during this time.

Once the seller’s lender has ACCEPTED THE SHORT SALE in Writing – the Escrow process begins.

• You will have 17 days or LESS to remove your Contingencies
• Contingencies include (but not limited to) – Home Inspection, Appraisal, review of the Preliminary Title, Seller’s Disclosures, etc.
• Once these are removed and YOUR LENDER accepts the appraisal based on your offer, loan documents will be ordered for closing
• You sign your loan documents, wire the balance of your funds, your loan gets funded and the title co records your deed.
• YOU ARE NOW A HOMEOWNER!!

To the seller: I can help you decide on your options and review the documentation needed.

To the buyer: Let’s get your pre-approval, find the right home, write the best offer and close the escrow.