Lee Group Real Estate LLC
10025 Courthouse Road
Vienna, VA 22181
ph: (703) 362-9913
callkay4
***Please check with your tax consultant regarding the tax law changes on Short sale and foreclosure.
Now, I am going to give you a little explanation on how short sale process works.
1. A short sale is when a borrower (of mortgage) can't afford the monthly mortgage payment due to some very dire situations. The situations include a death in the family, serious illness you or your family member, loss of job of you or your co-borrower, separation or divorce. Technically, the borrower should be able to provide the proof of the economic hardship. So, you should be able to provide the evidence of hardship if your lender asks for it. But, for starting the short sale process, a hardship letter will do.
2. Short sales occur only when the borrower owes a lot more with the mortgage than what he can get buying selling his property in normal way. For example, if he owes $500,000 on the house and the house will sell for only $350,000 due to the market change, then the borrower gets all the supporting documents and a ratified contract showing the sales price of $350,000 (or whatever) and requests the bank to release him from his mortgage obligation and let him go by accepting this offer even though it is "short" of what he owes to the bank.
3. The banks will let the offer and all the paper work sit for 60 to 90 days before a "negotiator" contacts the representative of the borrower. The representative is mostly the listing agent and he needs to get the assignment letter (notarized first) sent to the bank before even the paperwork or any talks with the bank starts. You can get the notarization taken care of by your bank where you have an account.
4. About 60% (my guess) or more of the current short sales are not due to the above mentioned economic hardship. The borrowers want to dump the house since the price has gone down so much. Also, since the bank is so busy and overwhelmed with the short sales, they don't verify the economic hardship. So, it's easier to fool the bank.
5. After sitting the original contract, and a lot of times 2nd or 3rd contract, since a lot of new buyers of short sales will withdraw from the contract after waiting and waiting, the negotiator will start going through the documents and contract and starts asking one correction after another. And each correction takes more than 1 week. I should know I have dealt with it. And finally, the negotiator asks for the HUD to find out how much the bank will get or lose from accepting this short sale contract. As mentioned, the HUD can be prepared either by the selling agent or the new purchaser's settlement company.
6. Once the HUD is gone up to the supervisor of the negotiator, that's when the counter-offer comes. A short sale contract I have had, then let us sit for 7 months and asked for $90,000 more. My client refused and the house eventually went to foreclosure, for a lot less money.
7. In VA and MD, the law says that the bank has to wait 3 months before sending the default letter, even though they call a lot. And when the borrower fails to pay 6 months in a row then the house gets foreclosed. And in any bank, the foreclosure department doesn't coordinate with the short sale department. So, while the short sale negotiation is going along, the foreclosure department also moves along toward the foreclosure. That's why so many short sales listings eventually finish up going to foreclosure. One way of delaying the foreclosure while you are on the short sale process is paying one month's portion of the mortgage payment, but almost all borrowers don't want to do that.
8. Short sales save a borrower credit a bit. Short sale status messes up the borrower's credit for 3 years, while the foreclosure affects 7 years. Recently, FHA has loosened up its rules. Now a buyer who has had short saled his/her previous home can get an FHA loan within 1 year! But, you still need to be good with other bills and they will require some education time and documentation. Still, I think it is great!
IMPORTANT NOTICE:Lee Group Real Estate LLC is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit rating.
I have 100% success rate in short sale on listing side. If you are having a financial issue, call me before you stop paying your mortgage.
Copyright 2010 Lee Group Real Estate LLC. All rights reserved.
Lee Group Real Estate LLC
10025 Courthouse Road
Vienna, VA 22181
ph: (703) 362-9913
callkay4