We’ve been listing and selling short sales for more than 3 years. Banks used to fight tooth and nail to hold onto the property and threaten foreclosure if the seller did not pay up. Now…we see banks sitting on their hands because so many homeowner’s have decided to take them up on that foreclosure offer! Needless to say, “Houston…we have a problem”.
Homeowners are in a state of confusion, the kind of confusion that makes you so paralyzed it’s difficult to make important decisions.
It’s unfortunate, but true, there’s a lot of “bad” information being given by so called short sale specialists and attorneys. We always suggest that our clients speak to an attorney prior to selling their home on short sale and I wish we could say that our clients always get solid “knowledge” from the attorney they consult.
With that said, all banks are different in their terms of settlement when accepting a short sale. The fact that you have a second lien on the property also adds another element to the approval conditions because both lien holders have to approve and agree on the settlement terms.
Not to get too complicated…but the fact that you did or did not ever refinance the home also has a lot to do with the lender being able to pursue you for the original loan amount. If you purchased the home,and did not refinance or take out a second, even if it was an 80/20 loan it is considered “purchase money loan” and the bank has no recourse against you in the state of California. You need to work with a licensed real estate agent that understands your states foreclosure laws.
****Something to keep in mind, a foreclosure in most cases is your primary loan taking action to regain possession of the property. If you have taken out a second lien, a home equity line of credit, or any other liens on the home these loans will remain collectible against you and you may be actively pursued by the debtor/s to cure any liens or notes. Walking away does not relieve you of the home mortgage debt.
Here are some key elements that you should be aware of when you decide to short sale your home.
- If you have more than one loan on the property your real estate agent must negotiate with all lien holders to get approval to sell the property.
- Depending on the investor of your loan/s you may be asked to contribute to the release of these liens. If you have the means it may be requested that funds be brought to close of escrow. In most cases, 2nd lien holders have been known to request on average 10% of the balance due them.
- In most cases your real estate agent can negotiate terms to pay this small balance back to the lender over 5 plus years with no interest. This is referred to as a promissory note. Keep in mind, you are going to be resolving your debt for pennies on the dollar. Example-you borrowed $200,000 on a second. They want you to pay $20,000 to release you from $180,000 debt…no recourse.
- HAFA is a Government program that you can apply for if you meet the guidelines of the program.
If you or someone you know is considering a short sale, please contact us for a confidential consultation. One thing that we want to make sure you are aware of is that the real estate commissions are paid by your lender. There is no charge to you for our services.
IMPORTANT NOTICE
You may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance we obtain from your lender [or servicer]. If you reject the offer, you do not have to pay us. If you accept the offer, you will have to pay us 6%; Six Percent or the %, Percentage agreed to by your lender or servicer for our services.
Platinum Real Estate 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.
