Qualifying For a Short Sale
Qualifying For a Short Sale
Temporary Relief Options
- Forbearance is an agreement to temporarily let you as a borrower pay less thatn the full amount of your mortgage payment, or pay nothing at all, during the "forbearance period." A lender may consider forbearance when you can show that funds from a bonus tax refund, or other source may enable you bring the mortgage balance current at a certain time in the near future.
- A reinstatement occurs when you pay your lender the total amount you are behind, in a lump sum, by a specific date. This is often combined with forbearance.
- A repayment plan is an agreement that gives you a fixed amount of time to repay the amount you are behind, by combining a portion of what is past due with you regular monthly payment. At the end of the repayment period, you have gradually paid back the amount of your mortgage that was delinquent.
Permanent Relief Options
- A Short Sale- If you can sell you house, but the sale proceeds are less than the total amount you owe on you mortgage, your lender may agree to a short payoff or short sale and write off the portion of you mortgage that exceeds the sales price plus closing costs.
- Deed in Lieu of Foreclosure- Your lender may agree to a deed in lieu of foreclosure wherein you voluntarily transfer title to your property to your lender in exchange for cancellation of you mortgage debt. A lender may require, among other things, for you to try to sell your home for its fair market value for, as and example, at least 90 days before agreeing to this option. This option may not be feasible if there are other liens on your home, such as judgments from other creditors, second mortgages, or tax liens.
- A loan modification is a written agreement between you and your lender to permanently change one or more of the original terms of your loan to make the payments more affordable for you. Common loan modifications include:
a-Adding missed payments to the existing loan balance.
b-Rewriting an adjustable-rate mortgage into a fixed -rate mortgage.
c-Extending the number of years for you to repay the loan
How do you know if you qualify for a Short Sale?
- PRIMARY RESIDENCE-A lender will generally consider the seller losing his or her place of residence as a "qualifying hardship".
- SECOND HOME- A lender is generally willing to look at sellers trying to sell their second home in order to save their primary residence.
- INVESTMENT PROPERTIES- A lender generally has more stringent requirements for sellers with investment properties.
What are some qualifying hardships a lender would consider?
- Unemployement -Letter from previous employer indicating you are no longer employed.
- Reduced Income- Letter verifying terms of reduced income-less hours/less pay.
- Divorce-Divorce documents that verify there is an order to sell the property
- Separation- If legal separation- documents verifying agreement and necessity to sell the property.
- Death of Spouse/Family Member- If decedent is on the loan-provide a copy of the death certificate.
- Payment Increase-Copy of note showing an increase-letter from lender explaining the increase in payments.
- Business Failure-- Letter from tax accountant explaining the current financial status of your business.
- Job Relocation- Letter from employer showing the term of your relocation.
- Illness-Doctor's letter showing time off from work, or if the seller has a disabilty, copies of disability checks.
- Medical Bills- Copy of bills or canceled checks for medical expenses.
- Damage to Property- Bids/bills for any repairs and an explanation of the damage.
- Military service- copy of service paperwork to show length of your commitment.
While short sale were virtually unheard of only a few years ago, now the majority of banks and lenders are negotiating and closing these deals. They allow a homeowner with a legitimate hardship to sell their property for less than the balance of their mortgage.
The issue is that the banks want the right type of deal with exactly the right paperwork and most agents are completely unaware of what the bank wants. This is why the majority of short sales are not accepted or take so long to close that buyers lose interest. We have teamed up with a staff of full time Short Sale negotiators and are Certified Distressed Property Experts, we know how to submit a package the banks will rush to close. We understand that you have a tough decision to make.
Because time is of the essence in this type of situation, we urge you to act now by contacting us at 619-818-8122 or email firstname.lastname@example.org .