Short Sale Solution

What is a Short Sale (Home Value is Less Than the Mortgage)?

A Short Sale is defined as the proceeds from the sale of your home would not be enough to cover the mortgage payoff, commissions, and all other closing costs. It is a common in today's market, especially if the home bought no money down or 90% was financed. Many people think that the only choices are foreclosure, bankruptcy, or just being stuck with their house, because they don't know about the Short Sale option.

With a Short Sale, the bank agrees to accept less than what is owed as "payment in full", to avoid foreclosure. If you are approved into the lender's Short Sale program, the lender agrees to "write-off' the mortgage shortage for the home to be sold at market value with typical closing costs.

We can help you through the entire process and paperwork. It can be a complex process and lenders can be frustrating to deal with, so it helps to have an experienced team in your corner. When it's all over, the house gets sold, you don't need to bring any money to the closing, and there is no foreclosure on your credit report. Our fee to handle the short sale is the commission that the lender pays us. There is no out-of-pocket cost to you.

What are the advantages for the homeowner in doing a Short Sale?

No cost or risk
The homeowner avoids a foreclosure on their record
The only damage to the homeowners credit is the points deducted for the missed payments
No income tax liability for the amount of debt forgiven by the lender (Signed into law December 21, 2007)

Why would a mortgage lender accept a Short Sale rather than foreclose?

The foreclosure process is too time-intensive, too costly and too state-to-state specific. Banks would rather just "cut their losses" and move on to replacing "bad loans" with "good loans". For the most part, mortgage companies do not want to be in the real estate business!
Real estate law and the foreclosure process differ drastically from state to state and lenders do not want to tie up their financial and legal resources trying to keep up with all the idiosyncrasies of state-specific law.
Most lending institutions have to hold in reserves (and cannot lend!) several times the value of the REO properties on their books. As we all know, mortgage lenders make money by lending money... if the amount they have to hold in reserves is a function of the REO properties on their books, you can see that they would want to keep these properties at a minimum.

What qualifies a homeowner for a Short Sale?